A Look Into Financial Services Sector Value Stocks

What are Value Stocks?

A value stock traditionally has a lower price when compared to stock prices of companies in the same industry. This indicates that the company may be undervalued, as investors are not expressing as much interest in such companies. The most commonly used way to check for value is with the price-to-earnings multiple, or P/E. A low P/E multiple is a good indication that the stock is undervalued.

The following stocks are considered to be notable value stocks in the financial services sector:

1. A-Mark Precious Metals AMRK - P/E: 3.5
2. Cowen COWN - P/E: 3.62
3. 360 DigiTech QFIN - P/E: 3.71
4. Nelnet NNI - P/E: 7.41
5. Employers Holdings EIG - P/E: 9.46

A-Mark Precious Metals has reported Q1 earnings per share at 2.17, which has decreased by 49.3% compared to Q4, which was 4.28. This quarter, Cowen experienced a decrease in earnings per share, which was 1.5 in Q2 and is now 1.32. The company's most recent dividend yield sits at 1.08%, which has increased by 0.03% from 1.05% last quarter.

360 DigiTech's earnings per share for Q3 sits at 1.58, whereas in Q2, they were at 1.55. Nelnet saw a decrease in earnings per share from 2.2 in Q2 to 1.23 now. The company's most recent dividend yield sits at 1.12%, which has decreased by 0.06% from 1.18% last quarter.

Employers Holdings has been featured as a value stock. Employers Holdings's Q3 EPS sits at 0.41, which has not changed since last quarter (Q2). Most recently, the company reported a dividend yield of 2.47%, which has increased by 0.06% from last quarter's yield of 2.41%.

The Significance: A value stock may need some time to rebound from its undervalued position. The risk of investing in a value stock is that this emergence may never materialize.