Dividend.com: 'Safe' Banks Look Costly

Are 'Safest' Banks Becoming Overvalued?

Some of our nation's newly-anointed "mega-banks" may be reaching share-price levels that far exceed the companies' true values.

As the unprecedented consolidation of our nation's banking system continues, some of the "safest" banks are beginning to look overbought.

Take a look at Wells Fargo(WFC Quote) shares, which are up nearly 20% year to date. This recent jump has the company trading at 3.9 times its tangible book value, which is a measure of a company's net worth, disregarding intangible assets. Typically, investment returns are better when buying shares of banks whose valuations hover in the 1.5-to-2.5 times tangible book value range. ...