A Look Into Financial Services Sector Value Stocks

What Defines a Value Stock?

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.

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

1. Emclaire Financial (NASDAQ:EMCF) - P/E: 9.03
2. Cohen & Co (AMEX:COHN) - P/E: 1.12
3. Capital Bancorp (NASDAQ:CBNK) - P/E: 8.4
4. Nelnet (NYSE:NNI) - P/E: 5.97
5. Navient (NASDAQ:NAVI) - P/E: 4.58

Most recently, Emclaire Financial reported earnings per share at 0.67, whereas in Q1 earnings per share sat at 0.79. Most recently, the company reported a dividend yield of 4.18%, which has decreased by 0.1% from last quarter's yield of 4.28%.

This quarter, Cohen & Co experienced a decrease in earnings per share, which was 7.52 in Q1 and is now 0.78. Most recently, the company reported a dividend yield of 5.06%, which has decreased by 8.38% from last quarter's yield of 13.44%.

Capital Bancorp's earnings per share for Q2 sits at 0.68, whereas in Q1, they were at 0.65. Its most recent dividend yield is at 0.91%, which has decreased by 2.09% from 3.0% in the previous quarter.

Nelnet has reported Q2 earnings per share at 2.2, which has decreased by 9.84% compared to Q1, which was 2.44. The company's most recent dividend yield sits at 1.18%, which has increased by 0.01% from 1.17% last quarter.

Most recently, Navient reported earnings per share at 0.98, whereas in Q1 earnings per share sat at 1.71. Most recently, the company reported a dividend yield of 2.95%, which has decreased by 0.75% from last quarter's yield of 3.7%.

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.