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Exactly a week ago, the Federal Reserve cleared the way for some of the U.S. biggest and most influential banks to re-instate and/or increase their current stock dividend. With this in mind, we wanted to look for the most undervalued American financials.

To compile this list we began with a universe of more than 180 U.S. financial stocks with market caps above $2 billion. We then took a closer look at the following ratios and compared them to the industry averages:

  • Price/Earnings Ratio
  • Price to Earnings Growth Ratio
  • Price to Free Cash Flow Ratio

We ultimately found eight stocks, which are all trading below the industry average on each of the categories.

Among these stocks are some very prominent names such as Goldman Sachs and Capital One Financial Corp. The first is one of the best investment banks on the street, which is bound to benefit from an increase in trading volumes, an improving M&A environment and an overall better economic landscape. The later is a diversified bank that has been favored by hedge fund manager John Paulson and Nomura analyst Brian Foran.

Having said that, which of these stocks are you most bullish about? Full details below.

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1. AFLAC Inc. (NYSE:AFL): Accident & Health Insurance Industry. Market cap of $24.95B. P/E at 14.42 vs. industry average 20.74. PEG at 0.8 vs. industry average 0.9. P/FCF 14.26 vs. industry average 17.42. The stock has had a couple of great days, gaining 5.19% over the last week.

2. Capital One Financial Corp. (NYSE:COF): Credit Services Industry. Market cap of $23.72B. P/E at 8.47 vs. industry average 11.24. PEG at 0.97 vs. industry average 1.23. P/FCF 8.45 vs. industry average 9.87. The stock has gained 23.89% over the last year.

3. Fidelity National Financial, Inc. (NYSE:FNF): Surety & Title Insurance Industry. Market cap of $3.09B. P/E at 5.96 vs. industry average 20.74. PEG at 0.74 vs. industry average 0.9. P/FCF 5.04 vs. industry average 17.42. Relatively low correlation to the market (beta = 0.53), which may be appealing to risk averse investors. The stock has lost 1.71% over the last year.

4. Hartford Financial Services Group Inc. (NYSE:HIG): Property & Casualty Insurance Industry. Market cap of $11.84B. P/E at 5.24 vs. industry average 20.74. PEG at 0.8 vs. industry average 0.89. P/FCF 3.86 vs. industry average 17.42. This is a risky stock that is significantly more volatile than the overall market (beta = 3.04). The stock has had a couple of great days, gaining 5.68% over the last week.

5. Protective Life Corp. (NYSE:PL): Life Insurance Industry. Market cap of $2.42B. P/E at 7.18 vs. industry average 20.74. PEG at 0.84 vs. industry average 0.9. P/FCF 7.04 vs. industry average 17.42. This is a risky stock that is significantly more volatile than the overall market (beta = 2.99). The stock has gained 29.82% over the last year.

6. Reinsurance Group of America Inc. (NYSE:RGA): Life Insurance Industry. Market cap of $3.85B. P/E at 5.9 vs. industry average 20.74. PEG at 0.55 vs. industry average 0.89. P/FCF 5.76 vs. industry average 17.42. The stock has gained 21.78% over the last year.

7. The Goldman Sachs Group, Inc. (NYSE:GS): Diversified Investments Industry. Market cap of $83.23B. P/E at 10.55 vs. industry average 11.78. PEG at 1.01 vs. industry average 1.14. P/FCF 6.52 vs. industry average 14.06. The stock has lost 7.72% over the last year.

8. Unum Group (NYSE:UNM): Accident & Health Insurance Industry. Market cap of $8.02B. P/E at 9.12 vs. industry average 20.74. PEG at 0.78 vs. industry average 0.9. P/FCF 8.37 vs. industry average 17.42. The stock has gained 7.51% over the last year.

9. Unum Group (UNM): Accident & Health Insurance Industry. Market cap of $8.02B. P/E at 9.12 vs. industry average 20.74. PEG at 0.78 vs. industry average 0.9. P/FCF 8.37 vs. industry average 17.42. The stock has gained 7.51% over the last year.

*Financial ratios sorted from Fidelity, all other data sorted from Finviz. (Note: Data collected on Friday afternoon)

Source: Top 8 Most Undervalued Financial Companies