Overview Of Value Stocks In The Financial Services Sector

The Meaning Behind 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.

Below is a list of notable value stocks in the financial services sector:

1. First Business Financial FBIZ - P/E: 9.83
2. Fidelity National Finl FNF - P/E: 5.89
3. Alliance Data Systems ADS - P/E: 9.41
4. Maiden Holdings MHLD - P/E: 2.31
5. Employers Holdings EIG - P/E: 7.12

Most recently, First Business Financial reported earnings per share at 1.12, whereas in Q4 earnings per share sat at 0.71. Most recently, the company reported a dividend yield of 2.86%, which has decreased by 1.01% from last quarter's yield of 3.87%.

This quarter, Fidelity National Finl experienced a decrease in earnings per share, which was 2.01 in Q4 and is now 1.56. The company's most recent dividend yield sits at 3.14%, which has decreased by 0.5% from 3.64% last quarter.

Alliance Data Systems saw an increase in earnings per share from 3.31 in Q4 to 6.28 now. Its most recent dividend yield is at 0.78%, which has decreased by 0.46% from 1.24% in the previous quarter.

Most recently, Maiden Holdings reported earnings per share at 0.55, whereas in Q4 earnings per share sat at 0.53. Most recently, the company reported a dividend yield of 2.67%, which has decreased by 4.92% from last quarter's yield of 7.59%.

Employers Holdings has reported Q1 earnings per share at 0.51, which has decreased by 65.07% compared to Q4, which was 1.46. The company's most recent dividend yield sits at 2.49%, which has decreased by 0.63% from 3.12% last quarter.

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.