In my near-constant search for the next stocks to add to my Cabot Value Investor portfolio, a useful screening tool I use is courtesy of finviz.com, short for “Financial Visualizations.” There, I screen for stocks with low price-to-earnings and price-to-sales ratios, with high earnings growth – typically north of 10% expected EPS growth in the current fiscal year.
Right now, a simple search using those parameters brings up a whole lot of banks.
Of the 20 largest companies by market cap that show up in my screen, half of them are financials. One prominent name is a stock I currently recommend to my Cabot Value Investor readers. Most of the others are household names as well and are appealing to various degrees. I like three of them in particular. All three big bank stocks possess the combination of growth and value that I seek when searching for undervalued opportunities ripe for a major (and immediate) bounce-back.
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Here they are, from largest to “smallest” by market cap.
These Big Bank Stocks Are on Sale
Citigroup (C)
Forward P/E: 10.20
Price-to-sales: 2.61
Estimated 2026 EPS growth: 51.8%
The third-largest U.S. bank by assets, Citigroup is coming off an impressive third quarter (reported last week) in which it grew earnings by 39.8% and revenue by 8%. The $2.83 in earnings per share topped the $2.63 estimate, and the $23.84 billion in revenue marked the bank’s third-best quarter in the last decade. And yet, shares have fallen by about 6% since the earnings report, likely because trading profits – while up 2% year over year – declined 27% from the previous quarter due to a drop in equity trading revenue. Investment banking revenue also declined 13% quarter over quarter, despite being up 9% year over year. I think those are flimsy reasons for C shares to sell off, as quarterly trading and investment banking are subject to the whims of the market environment, while yearly progress is a better gauge of strength. Overall, Citi’s growth on both the top (on track for 12.6% revenue growth this year) and bottom lines is stellar, and yet the stock is 15% below its June highs and is only up 5% year to date. I see the post-earnings selling as overdone and needless, and expect the stock to bounce back rather swiftly.
Banco Santander (SAN)
Forward P/E: 10.27
Price-to-sales: 3.00
Estimated 2026 EPS growth: 20.8%
Banco Santander is a Spain-based bank that is the fourth largest in Europe by assets, but an expanding U.S. footprint has contributed to accelerating growth of late. The company’s fast-growing digital banking wing, OpenBank, is a hit in America and has helped Santander double its earnings per share in the last five years (the low-overhead digital banking approach has allowed the bank to shutter some of its physical branches, namely in Europe, which has contributed to higher profits). As a result, the stock has performed quite well – up 38% in the last 12 months and nearly tripling since the start of 2025. However, because of the rapid earnings growth, the stock is still relatively cheap, trading at just 10.3x forward earnings – well below the 12.6x it was trading for in late 2025. One thing to note with this stock, though: Santander reports third-quarter earnings next Wednesday, October 28. So you might want to hold off on starting big positions until after those come out.
UBS Group (UBS)
Forward P/E: 11.64
Price-to-sales: 3.13
Estimated 2026 EPS growth: 13.3%
Another cheap large-cap European bank, UBS – a former holding in this portfolio under my predecessor Bruce Kaser – is just a steady growth machine, posting double-digit sales and earnings growth in the second quarter and on track for 14.4% revenue growth for the year and 13.3% earnings growth. Like Santander, the Swiss bank reports third-quarter results next Wednesday, October 28. But unlike SAN, UBS shares have not taken off this year, up a mere 2.7% year to date and trading 14% below their early-September highs. At just 11.6x forward earnings estimates, the stock trades well below its five-year average (15x). It’s not growing as fast as Santander or Citigroup, but it arguably has just as much – if not more – value.
Those are three of my favorite undervalued banks right now. The fact that such prominent names in the financial space are trading at such deep discounts speaks to how underappreciated the sector as a whole has been of late – even in a U.S. and global economy that’s still growing.
And, of course, to learn the name of the undervalued bank I’m currently recommending to my Cabot Value Investor readers, you can take out a subscription by clicking here.
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