5 Value Stocks To Watch In The Financial Services Sector

The Meaning Behind Value Stocks

A value stock is traditionally defined in terms of how investors in the marketplace are valuing that company's future growth prospects. Low P/E multiples are good base indicators that the company is undervalued and can most likely be labelled as a value stock.

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

1. First Business Financial (NASDAQ:FBIZ) - P/E: 9.99
2. Mizuho Financial Group (NYSE:MFG) - P/E: 8.49
3. Enova International (NYSE:ENVA) - P/E: 2.52
4. Rand Capital (NASDAQ:RAND) - P/E: 5.27
5. Regional Management (NYSE:RM) - P/E: 8.8

First Business Financial's earnings per share for Q1 sits at 1.12, whereas in Q4, they were at 0.71. The company's most recent dividend yield sits at 2.86%, which has decreased by 1.01% from 3.87% last quarter.

Mizuho Financial Group saw a decrease in earnings per share from 0.52 in Q3 to 0.43 now. Mizuho Financial Group does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Enova International saw a decrease in earnings per share from 2.39 in Q4 to 2.2 now. Enova International does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Rand Capital saw a decrease in earnings per share from 0.29 in Q4 to -0.84 now. Most recently, the company reported a dividend yield of 2.14%, which has decreased by 0.37% from last quarter's yield of 2.51%.

Regional Management saw an increase in earnings per share from 1.28 in Q4 to 2.31 now. Regional Management does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

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.