Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 stocks made the list for top value stocks in the Banks industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Banks Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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5 Undervalued Banks Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Banks industry for Thursday, June 13, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Banks industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Amalgamated Bank’s Value Grade

Value Grade:

Amalgamated Bank (the Bank) is a New York state-chartered bank. The Bank offers a complete suite of commercial and retail banking, investment management and trust and custody services. Its commercial banking and trust businesses are national in scope and the Bank also offers a full range of products and services to both commercial and retail customers through its three branch offices across New York City, one branch office in Washington, D.C., one branch office in San Francisco, one commercial office in Boston and its digital banking platform. Its corporate divisions include Commercial Banking, Trust and Investment Management and Consumer Banking. Its product line includes residential mortgage loans, commercial and industrial (C&I;) loans, commercial real estate (CRE) loans, multifamily loans, consumer loans and a variety of commercial and consumer deposit products. It also offers online banking and bill payment services, online cash management, safe deposit box rentals and others.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Amalgamated Bank has a Value Score of 80, which is considered to be undervalued.

When you look at Amalgamated Bank’s price-to-sales ratio at 2.07 compared to the industry median at 1.82, this company has a higher price relative to revenue compared to its peers. This could make Amalgamated Bank’s stock less attractive for value investors.

Amalgamated Bank’s price-earnings ratio is 8.21 compared to the industry median at 9.97. This means it has a lower share price relative to earnings compared to its peers. This could make Amalgamated Bank more attractive for value investors.

Now, let’s assess Amalgamated Bank’s EV/EBITDA ratio, also known as enterprise multiple. At 5.3, when compared to the industry median of 6.4, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Amalgamated Bank’s shareholder yield is lower than its industry median ratio of 3.59%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Amalgamated Bank’s price-to-book ratio is higher than its industry median ratio of 0.88. This could make Amalgamated Bank less attractive to investors looking for a new addition to their portfolio.

First Bancshares Inc (Missouri)’s Value Grade

Value Grade:

First Bancshares, Inc. is a holding company for Stockmens Bank (the Bank). The Bank provides its customers with a range of community banking services. The Bank is engaged in the business of attracting deposits from, and making loans to, the general public, including individuals and businesses. It originates real estate loans, including one-to-four family residential mortgage loans, multi-family residential loans, commercial real estate loans, agricultural real estate loans and home equity loans and non-real estate loans, including commercial business, agricultural business and consumer loans. It also invests in mortgage-back securities, United States Government and agency securities and other assets. It conducts its business from its home office in Colorado Springs, Colorado, and eight full-service Missouri offices in Mountain Grove, Marshfield, Ava, Kissee, Mills, Gainesville, Crane, Hartville and Springfield, and full-service offices in Bartley, Nebraska and Akron, Colorado.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

First Bancshares Inc (Missouri) has a Value Score of 75, which is considered to be undervalued.

First Bancshares Inc (Missouri)’s price-earnings ratio is 9.2 compared to the industry median at 10.0. This means that it has a lower price relative to its earnings compared to its peers. This makes First Bancshares Inc (Missouri) more attractive for value investors.

First Bancshares Inc (Missouri)’s price-to-book ratio is lower than its peers. This could make First Bancshares Inc (Missouri) more attractive for value investors when compared to the industry median at 0.88.

You can read more about First Bancshares Inc (Missouri)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Landmark Bancorp Inc’s Value Grade

Value Grade:

Landmark Bancorp, Inc. is a financial holding company. The Company’s business consists of the ownership of Landmark National Bank (the Bank) and Landmark Risk Management, Inc., which are wholly owned subsidiaries of the Company. The Bank's primary deposit gathering and lending markets are geographically diversified throughout central, eastern, southeast, and southwest Kansas. The Bank is principally engaged in the business of attracting deposits from the general public and using such deposits, together with borrowings and other funds, to originate one-to-four family residential real estate, construction and land, commercial real estate, commercial, agricultural, municipal and consumer loans. The Bank also invests in certain investment and mortgage-related securities using deposits and other borrowings as funding sources. Landmark Risk Management, Inc. is a captive insurance company, which provides property and casualty insurance coverage to the Company and the Bank.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Landmark Bancorp Inc has a Value Score of 83, which is considered to be undervalued.

Landmark Bancorp Inc’s price-earnings ratio is 9.1 compared to the industry median at 10.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Landmark Bancorp Inc more attractive for value investors.

Landmark Bancorp Inc’s price-to-book ratio is higher than its peers. This could make Landmark Bancorp Inc less attractive for value investors when compared to the industry median at 0.88.

You can read more about Landmark Bancorp Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Plumas Bancorp’s Value Grade

Value Grade:

Plumas Bancorp is a bank holding company, which operates through its subsidiary, Plumas Bank (the Bank). The Bank is a state-chartered bank, which primary service in the Northeastern portion of California, with Lake Tahoe to the south and the Oregon border to the north, and the Northwestern portion of Nevada. The Bank primarily is engaged in providing loans and investment securities. The Banks principal commercial lending services include term real estate, commercial and industrial term loans. The Bank provides government-guaranteed and agricultural loans, as well as credit lines. The Banks principal retail lending services include consumer, automobile and home equity loans. The Bank provides land development and construction loans on a limited basis. The Bank has over 157 branch offices and 19 automated teller machines. The Bank also operates a lending office in Auburn, California and commercial/agricultural lending offices located in Chico, California and Klamath Falls, Oregon.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Plumas Bancorp has a Value Score of 85, which is considered to be undervalued.

Plumas Bancorp’s price-earnings ratio is 7.3 compared to the industry median at 10.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Plumas Bancorp more attractive for value investors.

Plumas Bancorp’s price-to-book ratio is lower than its peers. This could make Plumas Bancorp more attractive for value investors when compared to the industry median at 0.88.

You can read more about Plumas Bancorp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Grupo Supervielle SA -ADR’s Value Grade

Value Grade:

Grupo Supervielle S.A. is an Argentina-based universal financial services group. The Company offers retail and corporate banking, treasury, consumer finance, insurance, asset management and other products and services nationwide to a broad customer base including: individuals, small and medium-sized enterprises and medium to large-sized companies, among others. The Company operates through a multi-brand and multi-channel platform with a strategic national footprint.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Grupo Supervielle SA -ADR has a Value Score of 96, which is considered to be undervalued.

Grupo Supervielle SA -ADR’s price-earnings ratio is 5.4 compared to the industry median at 10.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Grupo Supervielle SA -ADR more attractive for value investors.

Grupo Supervielle SA -ADR’s price-to-book ratio is lower than its peers. This could make Grupo Supervielle SA -ADR fairly attractive for value investors when compared to the industry median at 0.88.

You can read more about Grupo Supervielle SA -ADR’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Banks Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Banks stocks as well as other industrys.

Choosing Which of the 5 Best Banks Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Amalgamated Bank stock has a Value Grade of B.
• First Bancshares Inc (Missouri) stock has a Value Grade of B.
• Landmark Bancorp Inc stock has a Value Grade of A.
• Plumas Bancorp stock has a Value Grade of A.
• Grupo Supervielle SA -ADR stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 undervalued stocks in the Banks industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Banks Stocks

Want to learn more about Banks stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 5 Undervalued Banks Stocks for Thursday, June 13
• 6 Undervalued Banks Stocks for Wednesday, June 12
• Why Banc of California Inc’s (BANC) Stock Is Up 4.88%
• Why Banco Macro SA (ADR)’s (BMA) Stock Is Up 4.67%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.