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 Monday, November 11, 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.

CNB Community Bancorp, Inc.’s Value Grade

Value Grade:

CNB Community Bancorp, Inc. operates as the bank holding company for County National Bank that provides retail and commercial banking services in Michigan. The company accepts various checking and savings accounts; individual retirement accounts; and time deposits and certificates of deposit. It also provides personal, automobile, boat, recreational and commercial vehicle, commercial and residential real estate, business equipment, and agricultural loans; home equity and operating lines of credit; insurance products; floor plans; SBA, USDA, and other guaranteed loans; fixed and variable rate products; and mortgages. In addition, the company offers ATM, and debit and credit cards; remote deposit, automated clearing house/cash management, overdraft, trust and estate settlement, investment management, private banking, and retirement and financial planning services, as well as mobile, online, and telephone banking services. CNB Community Bancorp, Inc. was founded in 1934 and is based in Hillsdale, 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.

CNB Community Bancorp, Inc. has a Value Score of 88, which is considered to be undervalued.

When you look at CNB Community Bancorp, Inc.’s price-to-sales ratio at 1.78 compared to the industry median at 3.12, this company has a lower price relative to revenue compared to its peers. This could make CNB Community Bancorp, Inc.’s stock more attractive for value investors.

CNB Community Bancorp, Inc.’s price-earnings ratio is 8.10 compared to the industry median at 13.00. This means it has a lower share price relative to earnings compared to its peers. This could make CNB Community Bancorp, Inc. 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. CNB Community Bancorp, Inc.’s shareholder yield is higher than its industry median ratio of 2.70%. 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. CNB Community Bancorp, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.08. This could make CNB Community Bancorp, Inc. more attractive to investors looking for a new addition to their portfolio.

CNB Corporation’s Value Grade

Value Grade:

CNB Corporation operates as the bank holding company for Citizens National Bank that provides various banking services to individuals, agricultural businesses, commercial businesses, and light industries in the United States. It offers various deposit products, including checking, savings, money market, and individual retirement accounts; and certificates of deposit. The company also provides personal loans, such as home mortgage, home equity, and auto loans, as well as checkmate lines of credit; and business loans, which include term, equipment, commercial real estate, commercial construction, and small business administration loans, as well as business lines of credit. In addition, it offers cash and wealth management solutions; night depository, money order, cashier's check, coin counting, notary, fax, and wire transfer services; safe deposit boxes; bank by mail, mobile and online banking, e-statement, bill pay, remote deposit capture, ACH, telephone banking, and direct deposit services; and debit, ATM, merchant, prepaid and payroll, gift, and credit cards. The company operates through various branches in Cheboygan, Presque Isle, and Emmet counties. CNB Corporation was founded in 1931 and is based in Cheboygan, 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.

CNB Corporation has a Value Score of 83, which is considered to be undervalued.

CNB Corporation’s price-earnings ratio is 6.6 compared to the industry median at 13.0. This means that it has a lower price relative to its earnings compared to its peers. This makes CNB Corporation more attractive for value investors.

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

You can read more about CNB 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.

First Keystone Corporation’s Value Grade

Value Grade:

First Keystone Corporation operates as the bank holding company for First Keystone Community Bank that provides various banking and related financial services to individual, business, government, and public and institutional customers in Northeastern Pennsylvania market area. The company accepts demand deposits and interest bearing demand deposits, money market accounts, checking and savings accounts, individual retirement accounts, time deposits, and certificate of deposits. It also offers commercial and industrial loans, which include short-term loans and lines of credit to finance machinery and equipment, inventory, and accounts receivable; commercial real estate loans secured primarily by commercial retail space, commercial office buildings, residential housing, and hotels; residential real estate loans, such as one-to-four family residential mortgage loans, home equity term loans, and home equity lines of credit; and consumer loans, including vehicle loans, stock secured loans, and loans secured by financial institution deposits. In addition, the company provides trust and agency services that include trust investment accounts, investment advisory services, mutual funds, estate planning, and management of pension and profit sharing plans to individuals, corporations, debit and credit cards, lockbox, ACH origination, remote deposit capture, merchant services, mobile remote deposit, and safe deposit boxes, as well as internet and telephone banking services. It operates full service offices and automated teller machines located in Columbia, Luzerne, Montour, Monroe, and Northampton counties. The company was founded in 1864 and is headquartered in Berwick, Pennsylvania.

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 Keystone Corporation has a Value Score of 72, which is considered to be undervalued.

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

You can read more about First Keystone 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 Plains Financial, Inc.’s Value Grade

Value Grade:

South Plains Financial, Inc. operates as a bank holding company for City Bank that provides commercial and consumer financial services to small and medium-sized businesses and individuals. The company operates through two segments, Banking and Insurance. It offers deposit products, including demand deposit accounts, interest-bearing products, savings accounts, and certificate of deposits. The company also provides commercial real estate loans; general and specialized commercial loans, including agricultural production and real estate, energy, finance, investment, and insurance loans, as well as loans to goods, services, restaurant and retail, construction, and other industries; residential construction loans; and 1-4 family residential loans, auto loans, and other loans for recreational vehicles or other purposes. In addition, it offers crop insurance products; trust products and services; investment services; mortgage banking services; online and mobile banking services; and debit and credit cards. The company was founded in 1941 and is headquartered in Lubbock, Texas.

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 Plains Financial, Inc. has a Value Score of 64, which is considered to be undervalued.

South Plains Financial, Inc.’s price-earnings ratio is 15.3 compared to the industry median at 13.0. This means that it has a higher price relative to its earnings compared to its peers. This makes South Plains Financial, Inc. less attractive for value investors.

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

You can read more about South Plains Financial, 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.

Wilson Bank Holding Company’s Value Grade

Value Grade:

Wilson Bank Holding Company operates as the bank holding company for Wilson Bank and Trust that provides various banking services to individuals, professionals, and small businesses in Tennessee. It offers checking, savings, and money market deposit accounts, as well as certificates of deposit; loans for consumer, commercial, and real estate purposes. The company also provides custodial, trust, and discount brokerage services. Wilson Bank Holding Company was founded in 1987 and is headquartered in Lebanon, Tennessee.

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.

Wilson Bank Holding Company has a Value Score of 82, which is considered to be undervalued.

Wilson Bank Holding Company’s price-earnings ratio is 9.1 compared to the industry median at 13.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Wilson Bank Holding Company more attractive for value investors.

Wilson Bank Holding Company’s price-to-book ratio is lower than its peers. This could make Wilson Bank Holding Company fairly attractive for value investors when compared to the industry median at 1.08.

You can read more about Wilson Bank Holding Company’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.

Woodlands Financial Services Company’s Value Grade

Value Grade:

Woodlands Financial Services Company operates as the financial services holding company for Woodlands Bank and Woodlands Stock Corporation that provides commercial and consumer banking, and trust services in Lycoming and Clinton counties in Pennsylvania. The company accepts checking and savings accounts, certificates of deposit, and individual retirement accounts. Its loan products include home, construction, bridge, and home equity loans and lines; auto, recreational vehicle, and student loans, as well as personal loans and personal lines of credit; and commercial real estate financing, working capital loans, equipment financing, vehicle financing, and lines of credit. It also offers credit cards; securlock, mobile deposit, merchant, fraud protection, cyber security, online and mobile banking, bill pay, and other services; and notary, safe deposit box, wire transfers, and treasurer checks services. In addition, the company provides personal trust, asset management and custodial, estate and financial planning, executor and estate settlement, charitable, IRA management, and institutional investment management services; and retirement plans, brokerage services, college savings, and insurance solutions. Woodlands Financial Services Company was founded in 1989 and is based in Williamsport, Pennsylvania.

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.

Woodlands Financial Services Company has a Value Score of 76, which is considered to be undervalued.

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

You can read more about Woodlands Financial Services Company’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.

• CNB Community Bancorp, Inc. stock has a Value Grade of A.
• CNB Corporation stock has a Value Grade of A.
• First Keystone Corporation stock has a Value Grade of B.
• South Plains Financial, Inc. stock has a Value Grade of B.
• Wilson Bank Holding Company stock has a Value Grade of A.
• Woodlands Financial Services Company 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 Monday, November 11
• 6 Undervalued Banks Stocks for Friday, November 08
• 6 Undervalued Banks Stocks for Thursday, November 07
• 6 Undervalued Banks Stocks for Wednesday, November 06

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.