5 Value Stocks In The Financial Services Sector

Understanding 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. Meridian MRBK - P/E: 8.94
2. Carlyle Secured Lending CGBD - P/E: 8.19
3. First Cap FCAP - P/E: 8.26
4. Red River Bancshares RRBI - P/E: 9.67
5. First Savings Financial FSFG - P/E: 9.21

Most recently, Meridian reported earnings per share at $0.77, whereas in Q3 earnings per share sat at $0.96. Its most recent dividend yield is at 3.12%, which has increased by 0.55% from 2.57% in the previous quarter.

Carlyle Secured Lending saw an increase in earnings per share from 0.4 in Q2 to $0.44 now. First Cap saw an increase in earnings per share from 0.93 in Q3 to $1.05 now. The company's most recent dividend yield sits at 4.3%, which has increased by 0.7% from 3.6% last quarter.

Red River Bancshares has been featured as a value stock. Red River Bancshares's Q4 EPS sits at $1.42, which has not changed since last quarter (Q3). Its most recent dividend yield is at 0.5%, which has decreased by 0.03% from 0.53% in the previous quarter.

This quarter, First Savings Financial experienced an increase in earnings per share, which was $0.35 in Q4 and is now $0.41. Most recently, the company reported a dividend yield of 2.31%, which has increased by 0.08% from last quarter's yield of 2.23%.

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.