Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 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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6 Undervalued Banks Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Banks industry for Friday, November 08, 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.

CW Bancorp’s Value Grade

Value Grade:

CW Bancorp operates as a holding company for CommerceWest Bank that provides various commercial banking products and services for small and mid-sized businesses in California. It offers checking, money market deposit, savings, sweep, escrow trust, NOW, and attorney client trust accounts; and certificate of deposits. The company also provides loans, including commercial real estate, asset based, mergers and acquisitions, international, and term loans, as well as lines of credit. In addition, it offers remote deposit solutions; and online banking, mobile banking, and treasury management services. The company was incorporated in 2001 and is headquartered in Irvine, California.

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.

CW Bancorp has a Value Score of 82, which is considered to be undervalued.

When you look at CW Bancorp’s price-to-sales ratio at 2.61 compared to the industry median at 3.09, this company has a lower price relative to revenue compared to its peers. This could make CW Bancorp’s stock more attractive for value investors.

CW Bancorp’s price-earnings ratio is 9.10 compared to the industry median at 12.90. This means it has a lower share price relative to earnings compared to its peers. This could make CW Bancorp more attractive for value investors.

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. CW Bancorp’s shareholder yield is higher than its industry median ratio of 2.60%. 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. CW Bancorp’s price-to-book ratio is higher than its industry median ratio of 1.08. This could make CW Bancorp less attractive to investors looking for a new addition to their portfolio.

F & M Bank Corp.’s Value Grade

Value Grade:

F & M Bank Corp. operates as the bank holding company for Farmers & Merchants Bank that provides financial products and services to consumers and businesses in Virginia. The company offers commercial and individual demand and time deposit accounts, savings accounts, money market accounts, internet and mobile banking services, and drive-in banking services. It also provides construction loans, including residential, and land acquisition and development loans; commercial real estate loans; business loans; consumer loans, such as personal loans, automobile loans, deposit account loans, installment and demand loans, and home equity loans; residential mortgage loans; credit cards; dealer finance; farmland loans; multi-family loans; and commercial and industrial loans. In addition, the company offers brokerage services and commercial and personal insurance products. Further, it originates conventional and government agency sponsored mortgages; and offers title insurance and real estate settlement services. The company was founded in 1908 and is headquartered in Timberville, Virginia.

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.

F & M Bank Corp. has a Value Score of 73, which is considered to be undervalued.

F & M Bank Corp.’s price-earnings ratio is 13.1 compared to the industry median at 12.9. This means that it has a higher price relative to its earnings compared to its peers. This makes F & M Bank Corp. less attractive for value investors.

F & M Bank Corp.’s price-to-book ratio is higher than its peers. This could make F & M Bank Corp. less attractive for value investors when compared to the industry median at 1.08.

You can read more about F & M Bank Corp.’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.

Oxford Bank Corporation’s Value Grade

Value Grade:

Oxford Bank Corporation provides banking products and services to various customers in Michigan. Its deposit products include savings, checking, money market, and individual retirement accounts, as well as certificates of deposit. The company’s loan portfolio comprises home mortgage, home equity line of credit, auto, student, term, commercial real estate, and small business administration loans, as well as lines of credit. It also offers cash management, merchant card, remote deposit capture, payroll, and overdraft protection; online, telephone, and mobile banking services; iPay online bill payment service; mobile wallet app; interactive teller machine services; debit and credit cards; and insurance products. In addition, the company provides cashier checks, direct deposits, night depository, wire transfer, and notary services. Oxford Bank Corporation was founded in 1884 and is based in Oxford, Michigan.

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.

Oxford Bank Corporation has a Value Score of 69, which is considered to be undervalued.

Oxford Bank Corporation’s price-earnings ratio is 6.8 compared to the industry median at 12.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Oxford Bank Corporation more attractive for value investors.

Oxford Bank Corporation’s price-to-book ratio is higher than its peers. This could make Oxford Bank Corporation less attractive for value investors when compared to the industry median at 1.08.

You can read more about Oxford Bank Corporation’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.

Peoples Financial Corporation’s Value Grade

Value Grade:

Peoples Financial Corporation operates as the bank holding company for The Peoples Bank that provides banking, financial, and trust services to government entities, individuals, and small and commercial businesses in Mississippi. The company accepts various deposits, such as interest and non-interest-bearing checking accounts, savings accounts, certificates of deposit, and individual retirement accounts (IRAs). It offers business, commercial, real estate, construction, personal, and installment loans; and personal trust, agencies, and estate services, including living and testamentary trusts, executorships, guardianships, and conservatorships. In addition, the company provides self-directed IRAs; and escrow management, stock transfer, and bond paying agency accounts to corporate customers. Further, it offers other services consisting of safe deposit box rental, wire transfer, night drop facilities, collection, cash management, and Internet banking services. the company provides services to customers of various industries, such as seafood, retail, hospitality, hotel/motel, gaming, and construction. Peoples Financial Corporation was founded in 1896 and is headquartered in Biloxi, Mississippi.

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.

Peoples Financial Corporation has a Value Score of 66, which is considered to be undervalued.

Peoples Financial Corporation’s price-earnings ratio is 3.8 compared to the industry median at 12.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Peoples Financial Corporation more attractive for value investors.

Peoples Financial Corporation’s price-to-book ratio is lower than its peers. This could make Peoples Financial Corporation more attractive for value investors when compared to the industry median at 1.08.

You can read more about Peoples Financial Corporation’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.

South Atlantic Bancshares, Inc.’s Value Grade

Value Grade:

South Atlantic Bancshares, Inc. operates as the bank holding company for South Atlantic Bank that provides consumer and commercial banking products and services to individuals, small businesses, and corporations in South Carolina. The company offers checking, money market, and saving accounts, as well as certificate of deposit, individual retirement, and health saving accounts; personal, auto, and recreation loans, as well as home equity and ready reserve overdraft line of credits, and commercial lending products; and credit cards. It also provides cash management and merchant card services; remote deposit capture and automated clearing house services; online, mobile, and telephone banking services; personal and business checks; mortgage products and services; and wealth management services. The company operates offices in Myrtle Beach, Carolina Forest, North Myrtle Beach, Murrells Inlet, Pawleys Island, Georgetown, Mount Pleasant, Charleston, Bluffton, Hilton Head Island, and Beaufort, South Carolina. South Atlantic Bancshares, Inc. was founded in 2007 and is headquartered in Myrtle Beach, South Carolina.

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.

South Atlantic Bancshares, Inc. has a Value Score of 67, which is considered to be undervalued.

South Atlantic Bancshares, Inc.’s price-earnings ratio is 12.0 compared to the industry median at 12.9. This means that it has a lower price relative to its earnings compared to its peers. This makes South Atlantic Bancshares, Inc. more attractive for value investors.

South Atlantic Bancshares, Inc.’s price-to-book ratio is lower than its peers. This could make South Atlantic Bancshares, Inc. fairly attractive for value investors when compared to the industry median at 1.08.

You can read more about South Atlantic Bancshares, 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.

Unity Bancorp, Inc.’s Value Grade

Value Grade:

Unity Bancorp, Inc. operates as a bank holding company for Unity Bank that provides range of commercial and retail banking services to individuals, small and medium sized businesses, and professional communities. It offers personal and business checking accounts, time deposits, money market accounts, savings accounts, and retirement accounts, as well as noninterest and interest-bearing demand deposits. The company also provides small business administration loans; commercial loans; and residential mortgage and consumer loans, including residential real estate, home equity lines and loans, and residential construction lines, as well as personal loans. In addition, it offers credit and debit cards, wire transfer, safe deposit box, automated teller, and internet and mobile banking services; and automated clearing house origination and remote deposit capture services. Unity Bancorp, Inc. was incorporated in 1991 and is headquartered in Clinton, New Jersey.

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.

Unity Bancorp, Inc. has a Value Score of 63, which is considered to be undervalued.

Unity Bancorp, Inc.’s price-earnings ratio is 11.5 compared to the industry median at 12.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Unity Bancorp, Inc. more attractive for value investors.

Unity Bancorp, Inc.’s price-to-book ratio is lower than its peers. This could make Unity Bancorp, Inc. more attractive for value investors when compared to the industry median at 1.08.

You can read more about Unity 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.

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 6 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.

• CW Bancorp stock has a Value Grade of A.
• F & M Bank Corp. stock has a Value Grade of B.
• Oxford Bank Corporation stock has a Value Grade of B.
• Peoples Financial Corporation stock has a Value Grade of B.
• South Atlantic Bancshares, Inc. stock has a Value Grade of B.
• Unity Bancorp, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 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.

• 6 Undervalued Banks Stocks for Friday, November 08
• 6 Undervalued Banks Stocks for Thursday, November 07
• 6 Undervalued Banks Stocks for Wednesday, November 06
• 5 Undervalued Banks Stocks for Tuesday, November 05

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.