Investing

5 Financial Giants Still Trading Under Book Value

Citigroup Inc. (NYSE: C) is the widest discount to book value of the money center banks, and it still has massive overseas exposure. It has right-sized its balance sheet and operations handily, but at 0.83 times book value it is a big discount to its rival banking giants. With shares at $61.09, Citi has a market cap of $174 billion, a well as a 52-week range of $34.52 to $61.30. It now yields more than 1%, and it seems likely that it should be able to continue finally raising its dividend payout ahead. Shares are valued at less than 12 times expected earnings, and the consensus price target is $62.12. Shares are up 22% since the November 8 close.

Capital One Financial Corp. (NYSE: COF) remains at a discount to book value most likely because of its outfit having high credit card exposure and being less of a brick-and-mortar banking outfit than other banks. Trading at $89.76, Capital One has a 52-week range of $58.03 to $91.64, a consensus price target of $89.57 and a market cap of $43 billion. It is valued at 0.93 times expected earnings and at just over 11 times forward earnings expectations. It pays a 1.8% dividend yield. Capital One shares are up 23% since the November 8 closing price of $72.84.

Bank of America Corp. (NYSE: BAC) seems to be out of the regulatory penalty box and is said to be among the best positioned of the larger banks to win off of higher interest rates ahead. It is valued at 0.95 times book value and at 13.7 times forward earnings expectations. With shares at $22.61, the market cap is $228 billion, and the 52-week range is $10.99 to $23.39. The consensus price target is $22.35. The dividend yield of 1.3% is expected to rise ahead. The stock price is up 33% from the $17.00 closing price on November 8.

There were many other financial companies trading under book value, but it is important to understand that there are many focuses inside of the financial sector: insurance, traditional banking, investment banking and consumer lending.

Other financials that still screen as being under book value are Legg Mason, Prudential, Citizens, Hartford and more. Some that are trading at book value to as much as 1.2 times book value include the likes of Regions, Unum, Morgan Stanley and SunTrust.

For other value investing picks, see the UBS top picks for 2017 and also the top 2017 financial picks from Deutsche Bank.