Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Consumer Finance industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Consumer Finance Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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7 Undervalued Consumer Finance Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Consumer Finance industry for Thursday, November 07, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Consumer Finance industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Consumer Portfolio Services, Inc.’s Value Grade

Value Grade:

Consumer Portfolio Services, Inc. operates as a specialty finance company in the United States. It is involved in the purchase and service of retail automobile contracts originated by franchised automobile dealers and select independent dealers in the sale of new and used automobiles, light trucks, and passenger vans. The company, through its automobile contract purchases, offers indirect financing to the customers of dealers with limited credit histories or past credit problems. It also serves as an alternative source of financing for dealers, facilitating sales to customers who are not able to obtain financing from commercial banks, credit unions, and the captive finance companies. In addition, the company acquires installment purchase contracts in merger and acquisition transactions; purchases immaterial amounts of vehicle purchase money loans from non-affiliated lenders. It services its automobile contracts through its branches in California, Nevada, Virginia, Florida, and Illinois. The company was incorporated in 1991 and is based in Las Vegas, Nevada.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Consumer Portfolio Services, Inc. has a Value Score of 83, which is considered to be undervalued.

When you look at Consumer Portfolio Services, Inc.’s price-to-sales ratio at 1.29 compared to the industry median at 1.29, this company has a higher price relative to revenue compared to its peers. This could make Consumer Portfolio Services, Inc.’s stock fairly attractive for value investors.

Consumer Portfolio Services, Inc.’s price-earnings ratio is 12.90 compared to the industry median at 13.40. This means it has a lower share price relative to earnings compared to its peers. This could make Consumer Portfolio Services, Inc. more attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Consumer Portfolio Services, Inc.’s shareholder yield is lower than its industry median ratio of 1.25%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Consumer Portfolio Services, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.16. This could make Consumer Portfolio Services, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Consumer Portfolio Services, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Consumer Portfolio Services, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 3.20. This could make Consumer Portfolio Services, Inc. more attractive because the lower P/FCF ratio indicates that Consumer Portfolio Services, Inc. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Currency Exchange International, Corp.’s Value Grade

Value Grade:

Currency Exchange International, Corp. provides foreign exchange technology and processing services in North America. It offers financial institutions, international wire payments, foreign check clearing, foreign bank note exchange, and foreign draft issuance solutions; corporate, hedge and risk management, and international payment solutions; and international traveler’s, foreign currency exchange, gold bullion coins and bars, and American Express traveler's cheque solutions. The company serves financial institutions and money service businesses, as well as travel, technology, payroll, healthcare, and nonprofit sectors. The company was formerly known as Currency Exchange International, Inc. and changed its name to Currency Exchange International, Corp. in October 2007. Currency Exchange International, Corp. was incorporated in 1998 and is headquartered in Orlando, Florida.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Currency Exchange International, Corp. has a Value Score of 85, which is considered to be undervalued.

Currency Exchange International, Corp.’s price-earnings ratio is 16.0 compared to the industry median at 13.4. This means that it has a higher price relative to its earnings compared to its peers. This makes Currency Exchange International, Corp. less attractive for value investors.

Currency Exchange International, Corp.’s price-to-book ratio is lower than its peers. This could make Currency Exchange International, Corp. more attractive for value investors when compared to the industry median at 1.16.

You can read more about Currency Exchange International, Corp.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Navient Corporation’s Value Grade

Value Grade:

Navient Corporation provides technology-enabled education finance and business processing solutions for education, health care, and government clients in the United States. It operates through three segments: Federal Education Loans, Consumer Lending, and Business Processing. The company owns Federal Family Education Loan Program (FFELP) loans that are insured or guaranteed by state or not-for-profit agencies; and performs servicing on its portfolios, as well as federal education loans held by other institutions. It also owns, originates, and services refinance and in-school private education loans; and offers business processing solutions, such as omnichannel contact center, workflow processing, and revenue cycle optimization services to federal agencies, state governments, tolling and parking authorities, other public sector clients, as well as hospitals, hospital systems, medical centers, large physician groups, other healthcare providers, and public health departments. In addition, the company provides corporate liquidity portfolio services. Navient Corporation was founded in 1973 and is headquartered in Herndon, Virginia.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Navient Corporation has a Value Score of 91, which is considered to be undervalued.

Navient Corporation’s price-earnings ratio is 22.6 compared to the industry median at 13.4. This means that it has a higher price relative to its earnings compared to its peers. This makes Navient Corporation less attractive for value investors.

Navient Corporation’s price-to-book ratio is higher than its peers. This could make Navient Corporation less attractive for value investors when compared to the industry median at 1.16.

You can read more about Navient Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Qifu Technology, Inc.’s Value Grade

Value Grade:

Qifu Technology, Inc., together with its subsidiaries, operates credit-tech platform under the 360 Jietiao brand in the People’s Republic of China. The company provides credit-driven services that matches borrowers with financial institutions to conduct customer acquisition, initial and credit screening, advanced risk assessment, credit assessment, fund matching, and other post-facilitation services; and platform services, including loan facilitation and post-facilitation services to financial institution partners under intelligence credit engine, referral services, and risk management software-as-a-service. It offers e-commerce loans, enterprise loans, and invoice loans to SME owners. It serves financial institutions, consumers, and small- and micro-enterprises. The company was formerly known as 360 DigiTech, Inc. and changed its name to Qifu Technology, Inc. in March 2023. Qifu Technology, Inc. was founded in 2016 and is headquartered in Shanghai, the People’s Republic of China.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Qifu Technology, Inc. has a Value Score of 99, which is considered to be undervalued.

Qifu Technology, Inc.’s price-earnings ratio is 7.8 compared to the industry median at 13.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Qifu Technology, Inc. more attractive for value investors.

Qifu Technology, Inc.’s price-to-book ratio is higher than its peers. This could make Qifu Technology, Inc. less attractive for value investors when compared to the industry median at 1.16.

You can read more about Qifu Technology, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Regional Management Corp.’s Value Grade

Value Grade:

Regional Management Corp., a diversified consumer finance company, provides various installment loan products primarily to customers with limited access to consumer credit from banks, thrifts, credit card companies, and other lenders in the United States. It offers small and large installment loans; and retail loans to finance the purchase of furniture, appliances, and other retail products. The company also provides insurance products, including credit life, credit accident and health, credit property, vehicle single interest, and credit involuntary unemployment insurance; collateral protection insurance; and property insurance, as well as reinsurance products. In addition, its loans are sourced through branches, centrally-managed direct mail campaigns, and digital partners, as well as its consumer website. The company was incorporated in 1987 and is headquartered in Greer, South Carolina.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Regional Management Corp. has a Value Score of 84, which is considered to be undervalued.

Regional Management Corp.’s price-earnings ratio is 12.8 compared to the industry median at 13.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Regional Management Corp. more attractive for value investors.

Regional Management Corp.’s price-to-book ratio is higher than its peers. This could make Regional Management Corp. less attractive for value investors when compared to the industry median at 1.16.

You can read more about Regional Management Corp.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Synchrony Financial’s Value Grade

Value Grade:

Synchrony Financial, together with its subsidiaries, operates as a consumer financial services company in the United States. It provides credit products, such as credit cards, commercial credit products, and consumer installment loans. The company also offers private label credit cards, dual co-brand and general purpose credit cards, short- and long-term installment loans, and consumer banking products; and deposit products, including certificates of deposit, individual retirement accounts, money market accounts, and savings accounts, and sweep and affinity deposits, as well as accepts deposits through third-party securities brokerage firms. In addition, it provides debt cancellation products to its credit card customers through online, mobile, and direct mail; and healthcare payments and financing solutions under the CareCredit and Walgreens brands; payments and financing solutions in the apparel, specialty retail, outdoor, music, and luxury industries, such as American Eagle, Dick's Sporting Goods, Guitar Center, Kawasaki, Pandora, Polaris, Suzuki, and Sweetwater. The company offers its credit products through programs established with a group of national and regional retailers, local merchants, manufacturers, buying groups, industry associations, and healthcare service providers; and deposit products through various channels, such as digital and print. It serves digital, health and wellness, retail, home, auto, telecommunications, jewelry, pets, and other industries. The company was founded in 1932 and is headquartered in Stamford, Connecticut.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Synchrony Financial has a Value Score of 85, which is considered to be undervalued.

Synchrony Financial’s price-earnings ratio is 8.8 compared to the industry median at 13.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Synchrony Financial more attractive for value investors.

Synchrony Financial’s price-to-book ratio is lower than its peers. This could make Synchrony Financial more attractive for value investors when compared to the industry median at 1.16.

You can read more about Synchrony Financial’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

World Acceptance Corporation’s Value Grade

Value Grade:

World Acceptance Corporation engages in consumer finance business in the United States. The company provides short-term small installment loans, medium-term larger installment loans, related credit insurance, and ancillary products and services to individuals. It offers income tax return preparation and filing services; and automobile club memberships. It serves individuals with limited access to other sources of consumer credit, such as banks, credit unions, other consumer finance businesses, and credit card lenders. World Acceptance Corporation was founded in 1962 and is headquartered in Greenville, South Carolina.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

World Acceptance Corporation has a Value Score of 90, which is considered to be undervalued.

World Acceptance Corporation’s price-earnings ratio is 8.6 compared to the industry median at 13.4. This means that it has a lower price relative to its earnings compared to its peers. This makes World Acceptance Corporation more attractive for value investors.

World Acceptance Corporation’s price-to-book ratio is lower than its peers. This could make World Acceptance Corporation more attractive for value investors when compared to the industry median at 1.16.

You can read more about World Acceptance Corporation’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Consumer Finance Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Consumer Finance stocks as well as other industrys.

Choosing Which of the 7 Best Consumer Finance Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Consumer Portfolio Services, Inc. stock has a Value Grade of A.
• Currency Exchange International, Corp. stock has a Value Grade of A.
• Navient Corporation stock has a Value Grade of A.
• Qifu Technology, Inc. stock has a Value Grade of A.
• Regional Management Corp. stock has a Value Grade of A.
• Synchrony Financial stock has a Value Grade of A.
• World Acceptance Corporation stock has a Value Grade of A.

Now that you have a bit more background about each of the 7 undervalued stocks in the Consumer Finance industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Consumer Finance Stocks

Want to learn more about Consumer Finance stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 7 Undervalued Consumer Finance Stocks for Thursday, November 07
• 3 Undervalued Consumer Finance Stocks for Wednesday, November 06
• 7 Undervalued Consumer Finance Stocks for Tuesday, November 05
• 6 Undervalued Consumer Finance Stocks for Monday, November 04

AAII Disclaimer

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