In the following video, Motley Fool financial analysts David Hanson and Matt Koppenheffer discuss a balanced approach to valuing bank equities.
David compares Bank of America's (BAC 2.63%) relatively cheap stock price and current low returns on equity with US Bancorp (USB 1.36%), a stock currently trading at a much higher valuation compared to tangible book value.
David also explains how Citigroup (C 4.47%) and Bank of America's current low valuations may represent a longer-term opportunity for investors, and he looks at Wells Fargo (WFC 2.28%) as an example of how a bank stock might provide great returns to investors in the future, despite a relatively high current valuation.
