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A Look Into Financial Services Sector Value Stocks

 

What Defines a Value Stock?

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. Investors Title NASDAQ:ITIC - P/E: 7.19
  2. Eagle Point Credit Co NYSE:ECC - P/E: 2.84
  3. Civista Bancshares NASDAQ:CIVB - P/E: 8.85
  4. National Western Life NASDAQ:NWLI - P/E: 4.65
  5. Unum NYSE:UNM - P/E: 6.85

Investors Title has reported Q2 earnings per share at $1.2, which has decreased by 63.08% compared to Q1, which was 3.25. Its most recent dividend yield is at 1.26%, which has increased by 0.16% from 1.1% in the previous quarter.

Eagle Point Credit Co saw a decrease in earnings per share from 0.44 in Q4 to $0.4 now. Its most recent dividend yield is at 13.48%, which has ('', 'not changed') by 0.0% from 13.48% in the previous quarter.

Civista Bancshares saw a decrease in earnings per share from 0.57 in Q1 to $0.53 now. Most recently, the company reported a dividend yield of 2.53%, which has decreased by 0.02% from last quarter's yield of 2.55%.

National Western Life's earnings per share for Q2 sits at $8.7, whereas in Q1, they were at 10.23. Most recently, the company reported a dividend yield of 0.16%, which has decreased by 0.05% from last quarter's yield of 0.21%.

Unum saw an increase in earnings per share from 1.36 in Q1 to $1.91 now. Most recently, the company reported a dividend yield of 4.17%, which has increased by 0.51% from last quarter's yield of 3.66%.

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.

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