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.
Below is a list of notable value stocks in the financial services sector:
- WSFS Financial (NASDAQ:WSFS) - P/E: 9.59
- Medallion Finl (NASDAQ:MFIN) - P/E: 4.24
- SB Finl Gr (NASDAQ:SBFG) - P/E: 9.02
- Citigroup (NYSE:C) - P/E: 8.42
- X Financial (NYSE:XYF) - P/E: 1.14
WSFS Financial saw an increase in earnings per share from 1.16 in Q2 to $1.23 now. The company's most recent dividend yield sits at 1.75%, which has increased by 0.31% from 1.44% last quarter.
Medallion Finl's earnings per share for Q3 sits at $0.48, whereas in Q2, they were at 0.62. Most recently, the company reported a dividend yield of 6.13%, which has increased by 2.23% from last quarter's yield of 3.9%.
SB Finl Gr has reported Q3 earnings per share at $0.4, which has decreased by 11.11% compared to Q2, which was 0.45. The company's most recent dividend yield sits at 4.22%, which has increased by 0.37% from 3.85% last quarter.
Citigroup's earnings per share for Q3 sits at $1.63, whereas in Q2, they were at 1.33. The company's most recent dividend yield sits at 5.24%, which has increased by 0.78% from 4.46% last quarter.
X Financial has reported Q3 earnings per share at $1.04, which has increased by 0.97% compared to Q2, which was 1.03.
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.