Below Book Value And Dividend Paying
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It’s probably impossible to know for sure if these bank stocks are worth seriously examining as investments but they do seem to qualify as cheap and as dividend-paying.
By cheap, I mean they’re trading below their book values and at much lower price-earnings ratios than the market taken as whole.
The crisis in regional banking has taken a toll, but is this an opportunity?
That they’re cheap doesn’t mean they can’t get cheaper, of course, but for those willing to investigate further, here’s a decent list with which to begin:
Here’s the weekly price chart for Cadence Bank:
The stock traded at $32 at the beginning of 2022 and now goes for $21, a drop in value of 34%.
F. N. B. Corporation (NYSE: FNB) is the Pittsburg, Pennsylvania-based bank now trading with a price-earnings ratio of 9.51 and at 74% of its book value. Earnings per share this year are -.80% and show growth over the past 5 years of 8.60%. F. N. B. pays a 4.16% dividend.
The weekly price chart for F. N. B. Corporation looks like this:
That’s a 17.90% drop from the February, 2023 high of $14.50 to the current price of $11.60.
New York Community Bancorp
The bank stock traded as high as $13 during October, 2021, dipped to as low as $6 earlier this month and then recovered to the current price of $8.99. That’s tremendous volatility for an equity in the financial services industry but it’s been that type of an era.
Provident Financial Services (NYSE: PFS) is the Jersey City, New Jersey bank, relatively lightly traded with an average daily volume of 501,000 shares and a relatively high short float of 5.12%. The bank trades at a 9% discount from book with a price-earnings ratio of 8.30. The company offers a dividend of 4.92%.
Here’s the weekly price chart for Provident Financial Services:
The stock went for $25 in August, 2022 and now trades at $19.44 for a 22% decline in value. It appears to be holding above the 200-week moving average, at least for now.
From the top of $61 in January, 2022 to the current price of $39.31 represents a loss from peak to present of 36%.
Western Alliance Bancorporation (NYSE: WAL) is trading at a 28% discount from book with a price-earnings ratio of 3.49. The bank pays a 4.26% dividend. The weekly price chart for Westeren Alliance Bancorporation looks like this:
This bank stock dropped from the top of $120 in early 2022 to the low of $10 earlier this month before recovering, somewhat, to $34.55. This type of extraordinary volatility is a once-in-an-era event, as mentioned.
These stocks are not recommendations: they are “below book value and paying dividends” situations requiring more extensive research.
Not investment advice. For educational purposes only.