This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Cheapest A-Rated Bank Stocks

Shares of Pacific Premier Bancorp (PPBI) of Irvine, Calif., closed at $14.13 Monday and traded for 12.4 times the consensus 2014 EPS estimate of $1.14. The company's ROTCE for the first three quarters of 2013 was 11.19%, down from 11.96% in 2012 and 12.48% in 2011. This year's performance has reflected higher provisions for loan losses, mainly to cover loans acquired through the purchase of failed banks from the Federal Deposit Insurance Corp.

Wells Fargo (WFC - Get Report) closed at $43.41 Monday. The shares trade for 10.8 times the consensus 2014 EPS estimate of $4.01.

Wells Fargo has consistently outperformed the other members of the "big four" U.S. banking club, which also includes JPMorgan Chase (JPM), Bank of America (BAC) and Citigroup (C). The company's ROTCE for the first three quarters of 2013 was 17.86%, increasing from 16.70% in 2012 and 16.50% in 2011.

Despite the strong performance and much lower level of regulatory pressure than JPMorgan Chase and Bank of America, Wells Fargo is not the most expensive stock among the "big four" on a forward P/E basis. That prize goes to Bank of America, with shares trading for 11.1 times the consensus 2014 EPS estimate of $1.34, based on Monday's closing price of $14.92. BAC's ROTCE for the first three quarters of 2013 was 7.44%, which was a major improvement from 2.96% in 2012 and 1.08% in 2011. Bank of America is rated a C-plus (Fair) by TheStreet Ratings.

The cheapest actively traded A-rated bank stock on a forward P/E basis is Capital One Financial (COF - Get Report). The stock closed at $69.42 Monday and traded for 10.0 times the consensus 2014 EPS estimate of $6.96. The company's ROTCE for the first three quarters of 2013 was 17.02%, improving from 14.64% in 2012 and 20.35% in 2011. The relatively weak performance during 2012 reflected extraordinary credit expenses following Capital One's purchase of HSBC's (HBC) U.S. credit card portfolio.

RELATED STORIES:



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

>Contact by Email.

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.
2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
COF $82.00 0.00%
WFC $54.05 0.00%
AAPL $124.75 0.00%
FB $80.78 0.00%
GOOG $524.05 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs