Interested in financial companies? Looking for undervalued stocks? Looking for ways to dip deeper into a company's profitability? You might like what we've put on our list.
The Price/Cash Flow ratio is a price-multiple valuation metric that also measures a firm's future financial health. An advantage of using cash flow is that it removes non-cash factors, which helps provide a clearer picture of how much money the firm is taking in from a valuation standpoint. Price/Cash Flow Ratio = Current Stock Price/Cash Flow Per Share.
EPS (earnings per share) growth illustrates the growth of earnings per share over time. EPS growth rates help investors identify stocks that are increasing or decreasing in profitability. This profitability metric is generally a key driver in the price of the stock as it directly correlates to the profitability of the company as a whole.
We first looked for Financial stocks that are trading at low price-multiple valuations (P/CFO<10) and that have shown strong bottom-line growth over the last year (1-year fiscal EPS growth rate>10%). We did not screen out any market caps.
Do you think these financial stocks will go up in valuation? Use our screened list as a starting point for your own analysis.
Nasdaq OMX Group Inc. (NDAQ)
Nasdaq OMX Group Inc. has a Price/Cash Flow Ratio of 5.48 and Earnings Per Share Growth of 12.69%. The short interest was 1.20% as of 04/24/2012. The NASDAQ OMX Group, Inc. delivers trading, clearing, exchange technology, regulatory, securities listing, and public company services worldwide. It offers trading across various asset classes, including cash equities, derivatives, debt, commodities, structured products, and exchange traded funds; market data products, financial indexes, capital formation solutions, financial services and market technology products and services, as well as clearing, settlement, and depository services. The company also provides trade reporting and trade comparison services, and risk management services; broker services comprising technology and customized securities administration solutions to financial participants.
Torchmark Corp. (TMK)
Torchmark Corp. has a Price/Cash Flow Ratio of 57.26 and Earnings Per Share Growth of 11.27%. The short interest was 2.69% as of 04/24/2012. Torchmark Corporation, an insurance holding company, provides individual life and supplemental health insurance, and annuities, to middle income households in the United States. Its life insurance products include traditional and interest sensitive whole life insurance, term life insurance, and other life insurance; and supplemental limited-benefit health insurance products comprise cancer and accident plans, as well as Medicare Supplements plans and Medicare Part D prescription drug insurance. The company's annuity products consist of single-premium and flexible-premium deferred annuities. The company sells its products through direct mail, Internet, television, magazine, exclusive agents, and independent agents in the United States, Canada, and New Zealand.
Assurant Inc. (AIZ)
|Industry:||Accident & Health Insurance|
Assurant Inc. has a Price/Cash Flow Ratio of 2.94 and Earnings Per Share Growth of 122.86%. The short interest was 4.06% as of 04/24/2012. Assurant, Inc., through its subsidiaries, provides specialized insurance products and related services in North America and internationally. It operates in four segments: Assurant Solutions, Assurant Specialty Property, Assurant Health and Assurant Employee Benefits. The Assurant Solutions segment offers extended service contracts and warranties that provide coverage on cellular phones, personal computers, consumer electronics, appliances, automobiles, and recreational vehicles against mechanical breakdowns, accidental damages, and casualty losses.
Discover Financial Services (DFS)
Discover Financial Services has a Price/Cash Flow Ratio of 2.75 and Earnings Per Share Growth of 233.36%. The short interest was 1.01% as of 04/24/2012. Discover Financial Services, a bank holding company, offers direct banking and payment services in the United States. It operates in two segments, Direct Banking and Payment Services. The Direct Banking segment offers Discover card-branded credit cards to individuals and small businesses that are accepted on the Discover Network.
Legg Mason Inc. (LM)
Legg Mason Inc. has a Price/Cash Flow Ratio of 2.07 and Earnings Per Share Growth of 24.16%. The short interest was 5.29% as of 04/24/2012. Legg Mason, Inc., through its subsidiaries, operates as an asset management company worldwide. The company provides investment management and related services to institutional and individual clients; company-sponsored mutual funds; and other pooled investment vehicles. It offers a range of investment management products that include proprietary mutual funds ranging from money market and other liquidity products to fixed income and equity funds; and other domestic and offshore funds, as well as funds-of-hedge funds.
Regions Financial Corp. (RF)
|Industry:||Regional - Southeast Banks|
Regions Financial Corp. has a Price/Cash Flow Ratio of 3.59 and Earnings Per Share Growth of 96.48%. The short interest was 0.92% as of 04/24/2012. Regions Financial Corporation operates as the holding company for Regions Bank that provides a range of commercial, retail, and mortgage banking services in the United States. It offers various deposit products, including savings and transaction accounts; demand deposit accounts; money market accounts; and time deposits, such as certificate of deposits and individual retirement accounts. The company's loan portfolio comprises commercial loans, such as commercial and industrial, and owner occupied commercial real estate mortgage and construction loans; investor real estate loans, including commercial real estate mortgage and construction loans; and consumer loans, which consist of residential first mortgage, home equity, indirect, consumer credit card, and other consumer loans. Regions Financial Corporation, through other subsidiaries, also provides regional brokerage and investment banking products and services, such as securities brokerage, trust, asset management, financial planning, mutual funds, securities underwriting, sales and trading, and investment banking services for individual and institutional investors; and insurance brokerage services for various lines of personal and commercial insurance comprising property, casualty, life, health, and accident.
*Company profiles were sourced from Finviz.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.