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
TheStreet Open House

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) 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). 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

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

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
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

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

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
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!
DOW 17,279.74 +13.75 0.08%
S&P 500 2,010.40 -0.96 -0.05%
NASDAQ 4,579.7890 -13.6380 -0.30%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs