Is Capitol Federal Financial, Inc. overvalued or undervalued?

As of 23 October 2024, the valuation grade for Capitol Federal Financial, Inc. has moved from risky to very attractive. The company is currently undervalued, with a P/E ratio of 15, a price to book value of 0.74, and an impressive dividend yield of 603.23%. In comparison to its peers, Provident Financial Services, Inc. has a P/E ratio of 11.44, and Northwest Bancshares, Inc. stands at 12.93, indicating that Capitol Federal Financial is trading at a premium relative to these competitors.
Despite the attractive valuation metrics, the company's return on equity (ROE) is relatively low at 5.06%, and the return on capital employed (ROCE) is just 2.37%. These figures suggest that while the stock may be undervalued, operational efficiency could be a concern. Notably, Capitol Federal Financial has outperformed the S&P 500 over the past year, returning 11.72% compared to the S&P 500's 10.26%, reinforcing the notion that the stock is a compelling investment opportunity at its current price of 5.91.