Commonwealth Bank of Australia (ASX: CBA) and National Australia Bank Ltd (ASX: NAB) shares have both produced strong gains for investors this year.

Commonwealth Bank shares are currently trading at $143.32, up 26% so far this year, while National Australia Bank shares are up 28% and currently trade at $39.42.

With both bank stocks performing well this year, which one offers better value for investors? Let's see what the experts think.

First, the investment backdrop

The ASX 200 is dominated by two main sectors: banks and miners. As my colleague Tristan recently reported, this year, the bank sector has outshined the miners.

But does that mean its time to invest in the banks for continued growth, or should investors consider switching to the beaten-up mining shares?

Some fund managers think bank valuations have become stretched. WAM Leaders Ltd (ASX: WLE) recently pointed out that the banking majors are not delivering the earnings growth to justify their elevated valuations.

The firm suggested that large institutions – such as superannuation funds – have been driving the buying spree in bank shares, possibly without enough attention to the value on offer.

It believes the market could see a turning point, with investors rapidly moving out of ASX bank shares and into mining stocks, which might cause "a rapid snapback."

Compare and contrast: CBA vs NAB shares

National Australia Bank shares have long been favoured by income-focused investors here in Australia.

According to CommSec, NAB is projected to deliver a dividend of $1.70 per share in FY25, implying a dividend yield of 4.3% at the current share price.

While this yield looks appealing, especially compared to term deposits, the bank's valuation has become a point of concern.

Its share price has risen significantly faster than its earnings, pushing its price-to-earnings (P/E) ratio to 18 times.

This is higher than its average P/E ratio over the past few years.

Rising arrears, falling net interest margins (NIMs), and competition in the lending market are potential headwinds that could challenge NAB's growth prospects.

Meanwhile, Commonwealth Bank shares have surged in 2024.

The bank recently announced the activation of its AI Factory in collaboration with Amazon Web Services (AWS), aiming to accelerate its adoption of generative AI across its business.

The bank's focus on using AI for enhanced customer experiences and efficiencies in operations could drive cost savings in the long term – if successful.

Furthermore, Commonwealth Bank's lending growth has been a key driver of its share price rise.

The bank reported lending $39 billion to businesses and providing home financing to 120,000 households over the past year.

With lending growth closely tied to bank share price performance, it could see continued momentum if this trend persists.

Which bank stock is the better buy?

So, CBA or NAB shares—which is the better buy? Well, despite strong performance, analysts are not bullish on either stock.

Goldman Sachs, for instance, has a sell rating on both banks. It recently reiterated its $100.35 price target for CBA, implying a 30% downside.

Similarly, Goldman set a $34.24 target for NAB shares, suggesting a 13% drop from current levels.

Meanwhile, both shares are rated as a 'moderate sell' by the consensus of analyst estimates, according to CommSec.

In fact, no brokers recommend to buy Commonwealth Bank right now, whereas one says to buy National Australia Bank.

CBA and NAB shares takeaway

CBA and NAB shares have been stellar performers in 2024, but both face headwinds that could impact future growth.

Commonwealth Bank stock is up 40% in the last year, whereas National Australia Bank shares are up 33%.