What I'm about to do is play devil's advocate.

Too many investors get excited and jump into a stock without comparing and contrasting it against other possibilities.

Before buying shares in the massive but troubled Bank of America (NYSE: BAC), read on as I present six alternatives.

Investors are valuing Bank of America at a price-to-book ratio of just 0.65, which means they question the underlying value of its assets and its ability to generate future returns.

I'll go beyond just listing a bunch of banks that seem healthier (Wells Fargo, US Bancorp, and BB&T are three such examples, if you're curious). Today I'll go straight to the financial industry's bargain bin. Like Bank of America, these companies have problems and have taken corresponding share price hits.

Companies priced for death

Company

Recent Share Price

Price-to-Book Ratio

American Capital (Nasdaq: ACAS)

$5.32

0.58

NorthStar Realty Finance (NYSE: NRF)

$3.52

0.22

Allied Irish Banks (NYSE: AIB)

$2.62

0.12

Regions Financial (NYSE: RF)

$7.70

0.65

Source: Yahoo! Finance.

Like Bank of America, these four stocks are all trading below a price-to-book value of 1.0 -- the traditional threshold that gets value investors salivating.

However, there are reasons that each of them is being discounted by the market.

American Capital is a business development company (it makes investments in other companies through debt and/or equity) that recently restructured its own debt. This was important because it allowed American Capital's auditors to lift their "going concern" paragraph from its financial statements. A going concern statement means that auditors have serious doubts about the company's ability to stay solvent over the next year -- until the next audit. That said, the restructuring comes at a high price and still leaves American Capital with a lot of debt on its books. (Read more here.)

NorthStar Realty Finance wows potential investors with an 11.8% dividend yield. Be careful, though. My Foolish colleague Matt Koppenheffer has this to say about NorthStar: "There is a speculative opportunity here thanks to the stock's rock-bottom 0.2 price-to-book multiple. But the underlying business doesn't exactly tickle my fancy, and I have serious misgivings about the future of the company's payout."

Allied Irish Banks passed the recent European bank stress tests. Of course, 83 of the other 90 banks did as well. Market sentiment for AIB still prices it at an eye-rubbing 0.12 P/B ratio, indicating serious questions regarding AIB's ability to raise $9.6 billion of additional capital this year and further questions about its ability to recover after that capital raise. 

Regions Financial, as its name indicates, is a regional bank (headquartered in Alabama). The big fear on regional banks is their exposure to commercial loans at a time when the health of commercial real estate is tenuous. About 60% of Regions' loan portfolio is in commercial loans or construction loans.

The question on all four of these companies is whether the basement-dwelling stock prices have fully accounted for the very real risks.

Companies with solid underlying businesses but near-term threats

Company

Recent Share Price

Price-to-Book Ratio

National Bank of Greece (NYSE: NBG)

$3.16

0.88

E*TRADE Financial (Nasdaq: ETFC)

$15.11

0.78

Source: Yahoo! Finance.

Both National Bank of Greece and E*TRADE have impressive operations and trade at slightly higher valuations than the other four. With all the news about the Greek sovereign debt crisis, it may surprise you that NBG is actually profitable on a trailing-12-month basis. Meanwhile, E*TRADE has a profitable discount brokerage hiding underneath all of its subprime exposure.

The primary question for both of these companies is whether their balance sheet woes are overblown.   

The final reminder
As you decide among Bank of America and these other downtrodden alternatives (or none of the above), remember that each has huge risks threatening its existence as a sustainable enterprise. I present these options not as recommendations, but merely to encourage you to compare and contrast as you do your research. By looking at a number of similar companies, savvy investors increase their chances of separating the wheat from the chaff. Good luck!

If you enjoyed this article, check out five stocks you should consider before buying a certain iPhone maker.

Fool contributor Anand Chokkavelu doesn't own shares in any company mentioned. The Fool has a disclosure policy.