Value Investing in Regional Banks: 6 Dividend Champions | FAST Graphs

Value Investing

Chuck Carnevale, co-founder of FAST Graphs (“Mr. Valuation”), reviews six regional banks that are all Dividend Champions—companies that have raised their dividends for at least 25 consecutive years. These banks generally yield nearly double the S&P 500, with only one yielding below 3%, and all are trading at fair or attractive valuations.

The featured banks are:

Arrow Financial (AROW)
Community Financial System (CBU)
Community Trust Bancshares (CTBI)
Citizens Financial Services (CZFS)
Bank of the Ozarks (OZK)
First Source (SRCE)

Chuck addresses a comment criticizing him for “bottom fishing,” noting that value investing is, by definition, buying companies below intrinsic value. This approach reduces risk and increases potential return through a combination of business growth, dividend income, and price-to-earnings (P/E) multiple expansion. He emphasizes that investors should determine their holding period—ideally 3–5 years or longer—and not judge investments on short-term price movements.

Key investing principles covered:

Orange line (intrinsic value) on FAST Graphs shows what the business is worth based on fundamentals. Buying below this line offers natural leverage.
Gold line (dividends) is the most predictable metric for income investors; steady increases are a hallmark of Dividend Champions.
Black line (price) is volatile and unpredictable—price often reverts toward the orange line over time.
Price-to-Book (P/B) is an additional important valuation measure for banks.

FAST Graphs Historical

Dividend Champion Regional Bank Cheat Sheet

General Points

All 6 banks: 25+ consecutive years of dividend increases.
Yields: Nearly all double the S&P 500’s yield; only one <3%.
All trading at fair or attractive valuations.
Best suited for long-term (3–5+ years) income-focused investors.
Key metrics: P/E relative to growth rate, Price-to-Book (P/B), dividend yield & growth, payout ratio, debt levels.

Chuck reiterates that income investors should focus on the reliability and growth of dividends rather than obsessing over short-term price fluctuations. The market frequently misprices stocks—buying undervalued quality companies positions investors for strong returns, even if the stock remains undervalued for a period. Conversely, overvaluation is a signal to consider selling.

He concludes by stressing due diligence—using FAST Graphs, reviewing company reports, investor relations materials, and multiple research sources—and warns that all investing is long-term ownership when done correctly. Buying at value is essential; otherwise, you’re speculating.

FAST Graphs Analyze Out Loud on Arrow Financial (AROW), Community Financial System (CBU), Community Trust Bancshares (CTBI), Citizens Financial Services (CZFS), Bank of the Ozarks (OZK), First Source (SRCE)

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Disclosure: Long NVDA.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the stocks mentioned or to solicit transactions or clients. Past performance of the companies discussed may not continue and the companies may not achieve the earnings growth as predicted. The information in this document is believed to be accurate, but under no circumstances should a person act upon the information contained within. We do not recommend that anyone act upon any investment information without first consulting an investment advisor as to the suitability of such investments for his specific situation.