A Look Into Financial Services Sector Value Stocks

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. Capital One Finl COF - P/E: 7.78
2. Flushing Financial FFIC - P/E: 6.97
3. Summit Finl Gr SMMF - P/E: 5.02
4. PNC Finl Servs Gr PNC - P/E: 8.74
5. First of Long Island FLIC - P/E: 6.8

Most recently, Capital One Finl reported earnings per share at $2.31, whereas in Q4 earnings per share sat at $2.82. The company's most recent dividend yield sits at 2.73%, which has increased by 0.66% from 2.07% last quarter.

Flushing Financial has reported Q1 earnings per share at $0.1, which has decreased by 82.46% compared to Q4, which was 0.57. Its most recent dividend yield is at 9.02%, which has increased by 4.54% from 4.48% in the previous quarter.

Summit Finl Gr's earnings per share for Q1 sits at $1.08, whereas in Q4, they were at 1.16. Most recently, the company reported a dividend yield of 4.11%, which has increased by 1.01% from last quarter's yield of 3.1%.

Most recently, PNC Finl Servs Gr reported earnings per share at $3.98, whereas in Q4 earnings per share sat at $3.49. Its most recent dividend yield is at 4.72%, which has increased by 0.96% from 3.76% in the previous quarter.

This quarter, First of Long Island experienced a decrease in earnings per share, which was $0.44 in Q4 and is now $0.29. Its most recent dividend yield is at 4.95%, which has increased by 0.31% from 4.64% in the previous 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.