Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 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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7 Undervalued Banks Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Banks industry for Wednesday, November 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.

Oak Ridge Financial Services, Inc.’s Value Grade

Value Grade:

Oak Ridge Financial Services, Inc. operates as a bank holding company for Bank of Oak Ridge that provides various banking products and services for individuals and businesses. It offers checking, savings, and money market accounts; overdrafts; auto, home equity, mortgage, business term, and business SBA loans; business lines of credit; credit cards; and online and mobile banking products and services. The company also provides health savings accounts, identity theft protection, wealth management, cash management, and remote deposit capture services; and auto, home, small business, renters, life, boat and watercraft, classic car, motorcycle, flood, pet, and umbrella insurance products. It operates through a network of branches in Oak Ridge, Greensboro, and Summerfield, North Carolina. The company was founded in 2000 and is based in Oak Ridge, North 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.

Oak Ridge Financial Services, Inc. has a Value Score of 77, which is considered to be undervalued.

When you look at Oak Ridge Financial Services, Inc.’s price-to-sales ratio at 2.19 compared to the industry median at 3.17, this company has a lower price relative to revenue compared to its peers. This could make Oak Ridge Financial Services, Inc.’s stock more attractive for value investors.

Oak Ridge Financial Services, Inc.’s price-earnings ratio is 9.90 compared to the industry median at 13.30. This means it has a lower share price relative to earnings compared to its peers. This could make Oak Ridge Financial Services, 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. Oak Ridge Financial Services, Inc.’s shareholder yield is lower 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. Oak Ridge Financial Services, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.10. This could make Oak Ridge Financial Services, Inc. more attractive to investors looking for a new addition to their portfolio.

Bank of Botetourt’s Value Grade

Value Grade:

Bank of Botetourt provides various banking products and services in Virginia. It offers checking, savings, money market, and individual retirement accounts, as well as certificates of deposit. The company also provides mortgage, home equity, consumer, auto, commercial real estate, lot, equipment, secured term, and agricultural loans, as well as lines of credit and overdrafts. In addition, it offers insurance products, including property, homeowner, flood, auto and truck, life, umbrella, cyber liability/data breach, and workers' compensation insurance products. Further, the company provides personalized investment services, such as financial and retirement planning, asset allocation and model management, planning for business owners, finance management, insurance, charitable, and estate planning services, as well as treasury management services. Additionally, it offers debit cards; bill payment services; and online, mobile, and telephone banking, as well as remote deposit capture and merchant services. The company was formerly known as Bank of Buchanan and changed its name to Bank of Botetourt in July 1995. The company was founded in 1899 and is headquartered in Buchanan, 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.

Bank of Botetourt has a Value Score of 84, which is considered to be undervalued.

Bank of Botetourt’s price-earnings ratio is 8.6 compared to the industry median at 13.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Bank of Botetourt more attractive for value investors.

Bank of Botetourt’s price-to-book ratio is higher than its peers. This could make Bank of Botetourt less attractive for value investors when compared to the industry median at 1.10.

You can read more about Bank of Botetourt’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.

Community Bancorp’s Value Grade

Value Grade:

Community Bancorp. operates as the bank holding company for Community National Bank that provides financial services to individuals, businesses, nonprofit organizations, and municipalities in northern and central Vermont. It offers financing for commercial business properties, equipment, inventories, and accounts receivable, as well as standby letters of credit; and business checking and other deposit accounts, cash management services, repurchase agreements, ACH and wire transfer services, card processing, and remote deposit capture. The company also provides commercial real estate lending products, including financing for commercial developers and investors, residential builders and developers, and community development entities, including credit products to facilitate the purchase of land and/or build structures for business; to develop residential or commercial properties; and for real estate secured financing of existing businesses, as well as financing to startups and other small businesses. In addition, it offers residential real estate lending products, including fixed-rate and adjustable rate residential mortgage and home equity loans; and retail credit services, which includes personal, automobile, and boat/recreational vehicle loans. The company also provides municipal and institutional banking services, such as deposit account services, term and tax-exempt loans, and lines of credit to state and local governments, schools, charities, membership, and not-for-profit associations. Further, it offers consumer banking services, including checking accounts, savings programs, ATMs, debit and credit cards, night deposit facilities, and online, mobile and telephone banking services. Community Bancorp. was founded in 1851 and is headquartered in Derby, Vermont.

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.

Community Bancorp has a Value Score of 90, which is considered to be undervalued.

Community Bancorp’s price-earnings ratio is 7.3 compared to the industry median at 13.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Community Bancorp more attractive for value investors.

Community Bancorp’s price-to-book ratio is higher than its peers. This could make Community Bancorp less attractive for value investors when compared to the industry median at 1.10.

You can read more about Community 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.

First Bankers Trustshares, Inc.’s Value Grade

Value Grade:

First Bankers Trustshares, Inc. operates as the bank holding company for First Bankers Trust Company, N.A. that provides various financial products and services to retail, institutional, and corporate customers. The company operates through Commercial Operating, Commercial Real Estate, Agricultural Operating, Agricultural Real Estate, Construction and Land Development, Real Estate Secured by 1-4 and Multi-Family, and Consumer segments. It accepts various deposit products, such as checking accounts, savings accounts, money market, certificates of deposit, and individual retirement accounts. The company’s lending services comprise commercial, consumer, and mortgage lending. In addition, it offers home equity lines of credit; and financing, such as term/equipment, real estate, line of credit, revolving line of credit, letter of credit, business credit cards, and government assisted and SBA loans, as well as refinancing loans. Further, the company provides overdraft protection services, direct deposits, debit and credit cards, safe deposit boxes, wire transfer services, and savings bonds; identity theft protection services; investment services; cash management services; and electronic banking services. First Bankers Trustshares, Inc. was founded in 1946 and is headquartered in Quincy, Illinois.

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 Bankers Trustshares, Inc. has a Value Score of 84, which is considered to be undervalued.

First Bankers Trustshares, Inc.’s price-earnings ratio is 11.5 compared to the industry median at 13.3. This means that it has a lower price relative to its earnings compared to its peers. This makes First Bankers Trustshares, Inc. more attractive for value investors.

First Bankers Trustshares, Inc.’s price-to-book ratio is higher than its peers. This could make First Bankers Trustshares, Inc. less attractive for value investors when compared to the industry median at 1.10.

You can read more about First Bankers Trustshares, 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.

Primis Financial Corp.’s Value Grade

Value Grade:

Primis Financial Corp. operates as the bank holding company for Primis Bank that provides a range of financial services to individuals and small and medium sized businesses in the United States. Its deposit products include checking, NOW, savings, and money market accounts, as well as certificates of deposits. The company also provides commercial business and real estate, construction, secured asset based, small business administration, mortgage warehouse lending products, as well as financing for medical, dental, and veterinary businesses; residential mortgage, trust mortgage, home equity lines of credit, secured and unsecured personal, and consumer loans, as well as life insurance premium financing and demand loans. It also offers cash management services comprising investment/sweep, zero balance, and controlled disbursement accounts; and wire transfer, employer/payroll processing, night depository, depository transfer, merchant, ACH origination, and remote deposit capture services. In addition, the company provides debit cards, ATM services, notary services, and mobile and online banking. It operates full-service branches in Virginia and Maryland. The company was formerly known as Southern National Bancorp of Virginia, Inc. and changed its name to Primis Financial Corp. Primis Financial Corp. was founded in 2004 and is based in McLean, 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.

Primis Financial Corp. has a Value Score of 79, which is considered to be undervalued.

Primis Financial Corp.’s price-to-book ratio is higher than its peers. This could make Primis Financial Corp. less attractive for value investors when compared to the industry median at 1.10.

You can read more about Primis Financial 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.

Security Bancorp, Inc.’s Value Grade

Value Grade:

Security Bancorp, Inc. operates as the bank holding company for Security Federal Savings Bank that provides banking products and services to individual and corporate customers in Tennessee. The company’s deposit products include checking and savings accounts, and certificates of deposit. It also offers consumer loans; mortgage loans; and commercial loans, including installment loans, lines of credit, and real estate lending. In addition, the company provides financial services, as well as online, mobile, and telephone banking services. Security Bancorp, Inc. was founded in 1960 and is headquartered in McMinnville, 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.

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

Security Bancorp, Inc.’s price-earnings ratio is 7.1 compared to the industry median at 13.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Security Bancorp, Inc. more attractive for value investors.

Security Bancorp, Inc.’s price-to-book ratio is higher than its peers. This could make Security Bancorp, Inc. less attractive for value investors when compared to the industry median at 1.10.

You can read more about Security 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.

First Financial Corporation’s Value Grade

Value Grade:

First Financial Corporation, through its subsidiaries, provides various financial services. The company offers non-interest-bearing demand, interest-bearing demand, savings, time, and other time deposits. It also provides commercial loans primarily to expand a business or finance asset purchases; residential real estate and residential real estate construction loans; and home equity loans and lines, secured loans, and cash/CD secured and unsecured loans. In addition, the company offers lease financing, trust account, depositor, and insurance services. The company was founded in 1834 and is headquartered in Terre Haute, Indiana.

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 Financial Corporation has a Value Score of 73, which is considered to be undervalued.

First Financial Corporation’s price-earnings ratio is 13.5 compared to the industry median at 13.3. This means that it has a higher price relative to its earnings compared to its peers. This makes First Financial Corporation less attractive for value investors.

First Financial Corporation’s price-to-book ratio is lower than its peers. This could make First Financial Corporation fairly attractive for value investors when compared to the industry median at 1.10.

You can read more about First 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.

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 7 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.

• Oak Ridge Financial Services, Inc. stock has a Value Grade of B.
• Bank of Botetourt stock has a Value Grade of A.
• Community Bancorp stock has a Value Grade of A.
• First Bankers Trustshares, Inc. stock has a Value Grade of A.
• Primis Financial Corp. stock has a Value Grade of B.
• Security Bancorp, Inc. stock has a Value Grade of A.
• First Financial Corporation stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 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.

• 7 Undervalued Banks Stocks for Wednesday, November 13
• 3 Undervalued Banks Stocks for Tuesday, November 12
• 6 Undervalued Banks Stocks for Monday, November 11
• 6 Undervalued Banks Stocks for Friday, November 08

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.