Below Book Value And Dividend Paying

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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 Western 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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