Bank Stocks: Below Book Value And Dividend Paying

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:

Cadence Bank
(NYSE: CADE), with headquarters in Houston and in Tupelo, Mississippi, has 400 branch locations throughout the South and in Texas. It’s trading at a 4% discount to its book value with a price-earnings ratio of 8.56. Cadence pays a 4.46% dividend.

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

(NYSE: NYCB) now trades at a 42% discount from book with a price-earnings ratio of 7.13. The bank is paying a dividend of 7.56%. The weekly price chart for New York Community Bancorp is here:

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.

Webster Financial

(NYSE: WBS), headquartered in Stamford, Connecticut, is available for purchase at 87% of its book value. Trading with a price-earnings ratio of 10.88, the bank pays a 4.07% dividend. The weekly price chart for Webster Financial Corporation is here:

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.

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