Best-Performing Bank Stocks Are Also Among the Cheapest

Stifel Nicolaus estimates that JPMorgan's 2014 ROA will be 0.95%. Mutascio said JPMorgan "now trades at the lowest P/E multiple within our large-cap bank coverage universe" -- 8.2 times versus 9.7 times, and that the company's "size, exposure to re-regulation, and the 'London Whale' fiasco all probably combine to play a role in the discounted valuation."

Still, Mutascio mused, why "should it trade at a 31% discount to Comerica, a 20% discount to SunTrust (STI), and a 19% discount to KeyCorp (KEY), all of which have the same, if not lower, projected ROAs than JPMorgan? These types of discounts seem a bit large to us."

Mutascio has "hold" ratings on U.S. Bancorp, Comerica, KeyCorp and JPMorgan Chase.

-- Written by Philip van Doorn in Jupiter, Fla.

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Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.

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