Login
Password

Forgot your password?

Key Fundamental Statistics for US Banks

By Edited Aug 30, 2015 0 0

This is a summary and ranking of the key fundamental statistics for the largest US banks. The fundamental statistics of Canadian banks are also available. The industry took a well-deserved dive more than most others in 2008 due to the bad mortgages and the underlying securities tied to them becoming worthless or illiquid during the credit crisis. Most of these banks' stock prices have recovered a substantial portion of what they lost during that time, but several companies, namely Citigroup and Bank of America remain far off their highs. Traders remain polarized as some expect these companies to eventually return to the stock prices and dividend payouts seen during the good times. Others feel that they will or deserve to trade much lower than the current prices seen. This article compares how Citigroup, Bank of America and the other largest US banks fit in fundamentally with other US banks and the industry worldwide. The companies included in this list are as follows:

Bank of America Corp NYSE:BAC
BB&T Corporation NYSE:BBT
Capital One Financial Corporation NYSE:COF
Citigroup Inc NYSE:C
Fifth Third Bancorp NASDAQ:FITB
JPMorgan Chase and Co NYSE:JPM
PNC Financial Services Group Inc NYSE:PNC
Regions Financial Corp NYSE:RF
Suntrust Banks Incorporated NYSE:STI
US Bancorp NYSE:USB
Wells Fargo & Company NYSE:WFC


Price/Earnings

The Price to Earnings metric reflects a company's latest earnings performance in terms of its stock price. The lower the ratio, the more undervalued the company. A P/E of 15 or less is generally seen as acceptable for a mature industry such as US Financials. The industry metric of 28.7 is well above that, reflecting that investors expect a strong growth in earnings through a turnaround in the industry's current weak players. Given the questionable state of the US economic recovery it remains to be seen if it can happen. Despite the industry metric being rather high, there are several companies which have very decent P/E ratios. BAC, C, RF and STI are all excluded from this ranking as they currently produce negative earnings.

COF…............6.5
PNC….........10.0
JPM.........….11.0
USB…..........16.0
WFC….........16.4
BBT…….......21.9
Industry…28.7
FITB….......150.6


Price/Sales

The Price to Sales metric reflects a company's latest revenue in terms of its stock price. Its helpful to determine value in companies that currently have negative earnings. An acceptable P/S metric for the industry is between 1-2. The industry metric is 2.4, but most big players in the industry are in the 1-2 range. The industry metric is pushed up by international players which have a higher P/S and the weaker small cap companies in the US. The value is shown in the banks currently posting a loss as 3 of the top 4 most undervalued companies using P/S have negative earnings, with COF performing strongly again.

BAC…..........1.1
COF.............1.2
RF….............1.2
STI…...........1.5
FITB….........1.6
JPM…..........1.6
C………..........1.7
WFC…..........1.7
PNC…..........1.8
BBT…..........1.9
Industry…2.4
USB…..........2.7


Price/Book

The Price to Book metric values a company's equity on its balance sheet in terms of its price. The metric is useful but can be deceiving as asset values on the balance sheet reflect their cost rather than market value. Given the trouble with valuing certain distressed assets on the balance sheet, this method could be quite skewed. Companies are required by accounting standards to write down these assets to market value, which is one of the main drivers of negative earnings seen in many of the banks. Many of the banks have a P/B of less than 1.0, meaning the market values these banks at less than the stated equity value on their balance sheet. This can be a reflection of market confusion and doubt over market values of the assets, but it can also present a great opportunity to get a bank at a discount for someone who believes these assets will be handled prudently.

BAC…...........0.6
RF….............0.6
COF..........….0.7
STI…...........0.7
C…...............0.8
JPM..........…0.9
BBT…..........1.0
FITB….........1.0
PNC…..........1.0
Industry…1.3
WFC........….1.3
USB........….1.7

Profit Margin

Profit Margin shows a company's operational earnings in terms of revenue. A marginally positive profit margin for C and BAC is good news for those who expect both companies to turn around as this is a sign that their earnings should become positive soon. STI and RF still have a while to go until they see positive earnings based on their current margins.

PNC…...........20.47%
COF…............17.68%
USB…...........16.54%
JPM…...........15.86%
Industry….14.83%
WFC…...........14.10%
BBT….............8.96%
FITB…............5.12%
C…..................2.50%
BAC…............-1.05%
STI…............-2.83%
RF…............-18.18%


Dividend %

Dividend % is the amount of a company's yearly dividend payout in terms of its price. Many investors are interested in the banking industry because of its history of paying out good and consistent dividends. Much of that changed during the credit crisis as companies greatly reduced or ceased their dividends. As earnings turn around, it is expected that companies will increase their payouts. A popular long-term strategy by value investors is to buy Citigroup stock at these historically low prices in expectation that they will increase their dividend well above $1 seen during the good times and that the yearly effective rate on their investment would be 25% or more in addition to the obvious price increases the stock would see in such a scenario. The bank industry as a whole has a greater dividend payout % than all but one of the US banks. Much of that is helped by the Canadian banks which have payouts in the 3-5% range. There are also other great resources for finding high-paying dividend stocks available on the web.

BBT…..........2.42%
Industry…2.43%
USB…..........0.81%
WFC….........0.73%
PNC…..........0.71%
RF…............0.65%
COF…..........0.51%
JPM….........0.50%
BAC….........0.33%
FITB…........0.31%
STI…..........0.16%
C….............0.00%

My investment blog

Disclaimer: The source of the information was taken from TD Waterhouse Market Research services and Yahoo Finance as of November 15, 2010. I do not own any positions in any of the stocks mentioned in this article.

Refer to my other investment articles if you are interested in learning about:

Junior Gold Explorers

Biotech Stocks and Beaten Down Biotech Stocks

Natural Gas

Penny Stocks

Advertisement

Comments

Add a new comment - No HTML
You must be logged in and verified to post a comment. Please log in or sign up to comment.

Explore InfoBarrel

Auto Business & Money Entertainment Environment Health History Home & Garden InfoBarrel University Lifestyle Sports Technology Travel & Places
© Copyright 2008 - 2016 by Hinzie Media Inc. Terms of Service Privacy Policy XML Sitemap

Follow IB Business & Money