Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Financial Services 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 Financial Services 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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6 Undervalued Financial Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Financial Services industry for Thursday, May 14, 2026. Let’s take a closer look at their individual scores to see how they measure up against each other and the Financial Services 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.

Enact Holdings, Inc.’s Value Grade

Value Grade:

Enact Holdings, Inc. operates as a private mortgage insurance company in the United States. The company engages in writing and assuming residential mortgage guaranty insurance. It also offers private mortgage insurance products insuring prime-based, individually underwritten residential mortgage loans; pool mortgage insurance; contract underwriting services; and mortgage-related reinsurance products. The company serves large money center banks, non-bank lenders, national and local mortgage bankers, community banks, and credit unions. The company was formerly known as Genworth Mortgage Holdings, Inc. and changed its name to Enact Holdings, Inc. in May 2021. Enact Holdings, Inc. was founded in 1981 and is headquartered in Raleigh, North Carolina. Enact Holdings, Inc. is a subsidiary of Genworth Holdings Inc.

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.

Enact Holdings, Inc. has a Value Score of 86, which is considered to be undervalued.

When you look at Enact Holdings, Inc.’s price-to-sales ratio at 5.04 compared to the industry median at 1.85, this company has a higher price relative to revenue compared to its peers. This could make Enact Holdings, Inc.’s stock less attractive for value investors.

Enact Holdings, Inc.’s price-earnings ratio is 9.20 compared to the industry median at 14.85. This means it has a lower share price relative to earnings compared to its peers. This could make Enact Holdings, Inc. more attractive for value investors.

Now, let’s assess Enact Holdings, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 6.4, when compared to the industry median of 10.0, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

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. Enact Holdings, Inc.’s shareholder yield is higher than its industry median ratio of 0.00%. 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. Enact Holdings, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.38. This could make Enact Holdings, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Enact Holdings, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Enact Holdings, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 11.80. This could make Enact Holdings, Inc. more attractive because the lower P/FCF ratio indicates that Enact Holdings, 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.

Federal Agricultural Mortgage Corporation’s Value Grade

Value Grade:

Federal Agricultural Mortgage Corporation provides a secondary market for various loans made to borrowers in the United States. It operates through seven segments: Farm & Ranch, Corporate AgFinance, Power & Utilities, Broadband Infrastructure, Renewable Energy, Funding, and Investments. The Farm & Ranch segment includes the USDA Securities portfolio, Farm & Ranch loans, and AgVantage securities secured by Farm & Ranch loans. The Corporate AgFinance segment includes loans and AgVantage securities to larger and more complex farming operations, agribusinesses focused on food and fiber processing, and other supply chain production. The Power & Utilities segment includes loans to rural electric generation and transmission cooperatives and distribution cooperatives, as well as AgVantage securities secured by those types of loans. The Broadband Infrastructure segment includes loans to rural fiber, cable/broadband, tower, wireless, local exchange carrier, and data center projects. The Renewable Energy segment includes rural electric, solar, wind, and gas projects. The Funding segment includes debt issuance, hedging, asset/liability management, and capital allocation. The Investments segment includes an investment portfolio, which is held for liquidity purposes. The company is involved in a line of agricultural finance business, including purchasing and retaining eligible loans and securities; guaranteeing the payment of principal and interest on securities that represent interests in, or obligations secured by pools of eligible loans; servicing eligible loans; and issuing long-term standby purchase commitments for designated eligible loans. Federal Agricultural Mortgage Corporation was incorporated in 1987 and is headquartered in Washington, District Of Columbia.

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.

Federal Agricultural Mortgage Corporation has a Value Score of 67, which is considered to be undervalued.

Federal Agricultural Mortgage Corporation’s price-earnings ratio is 9.9 compared to the industry median at 14.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Federal Agricultural Mortgage Corporation more attractive for value investors.

Federal Agricultural Mortgage Corporation’s price-to-book ratio is lower than its peers. This could make Federal Agricultural Mortgage Corporation more attractive for value investors when compared to the industry median at 1.38.

You can read more about Federal Agricultural Mortgage 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.

Alerus Financial Corporation’s Value Grade

Value Grade:

Alerus Financial Corporation operates as the bank holding company for Alerus Financial, National Association that provides various financial services to businesses and consumers in the United States. The company operates in three segments: Banking, Retirement and Benefit Services, and Wealth. It offers demand deposits, interest-bearing transaction accounts, money market accounts, time and savings deposits, noninterest-bearing deposits, interest-bearing checking accounts, and certificates of deposit; and treasury management products, including electronic receivables management, remote deposit capture, cash vault, merchant, and other cash management services. The company also provides commercial loans, business term loans, and lines of credit; commercial real estate, and commercial and industrial loans; consumer lending products, including residential first mortgage loans; and installment loans, and loans collateralized by cash and marketable securities. In addition, it offers retirement plan, and investment advisory services, employee stock ownership plan, investment fiduciary services, health savings accounts, flex spending accounts, COBRA recordkeeping, and other administration services, as well as individual retirement accounts; and financial planning, investment management, personal and corporate trust, estate administration, and custody services. Further, the company provides debit cards, personal and business loans, credit cards, online and mobile banking/wallet, private banking, deposit and payment solutions, mortgages, administration, and government health insurance program services. The company was formerly known as First National Bank North Dakota and changed its name to Alerus Financial Corporation in 2000. Alerus Financial Corporation was founded in 1879 and is headquartered in Grand Forks, North Dakota.

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.

Alerus Financial Corporation has a Value Score of 61, which is considered to be undervalued.

Alerus Financial Corporation’s price-earnings ratio is 25.3 compared to the industry median at 14.9. This means that it has a higher price relative to its earnings compared to its peers. This makes Alerus Financial Corporation less attractive for value investors.

Alerus Financial Corporation’s price-to-book ratio is higher than its peers. This could make Alerus Financial Corporation less attractive for value investors when compared to the industry median at 1.38.

You can read more about Alerus Financial 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.

MGIC Investment Corporation’s Value Grade

Value Grade:

MGIC Investment Corporation, through its subsidiaries, provides private mortgage insurance, other mortgage credit risk management solutions, and ancillary services in the United States, the District of Columbia, Puerto Rico, and Guam. The company offers primary insurance that provides mortgage default protection on individual loans, as well as covers unpaid loan principal, delinquent interest, and various expenses associated with the default and subsequent foreclosure on the mortgage or sale of the underlying property. It also provides contract underwriting services, as well as reinsurance services. The company serves originators of residential mortgage loans, including savings institutions, commercial banks, mortgage brokers, credit unions, mortgage bankers, and other lenders. The company was founded in 1957 and is headquartered in Milwaukee, Wisconsin.

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.

MGIC Investment Corporation has a Value Score of 88, which is considered to be undervalued.

MGIC Investment Corporation’s price-earnings ratio is 8.2 compared to the industry median at 14.9. This means that it has a lower price relative to its earnings compared to its peers. This makes MGIC Investment Corporation more attractive for value investors.

MGIC Investment Corporation’s price-to-book ratio is higher than its peers. This could make MGIC Investment Corporation less attractive for value investors when compared to the industry median at 1.38.

You can read more about MGIC Investment 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.

Payoneer Global Inc.’s Value Grade

Value Grade:

Payoneer Global Inc. operates as a financial technology company. The company offers customers with a multi-currency account to serve their cross-border accounts receivable and accounts payable needs through payment infrastructure platform. It delivers a suite of services, such as funds management, working capital, multicurrency accounts, and workforce management. It also provides various payment options with minimal integration required, full back-office functions, and customer support. The company serves small and medium-sized businesses worldwide. Payoneer Global Inc. was founded in 2005 and is headquartered in New York, New York.

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.

Payoneer Global Inc. has a Value Score of 68, which is considered to be undervalued.

Payoneer Global Inc.’s price-earnings ratio is 24.8 compared to the industry median at 14.9. This means that it has a higher price relative to its earnings compared to its peers. This makes Payoneer Global Inc. less attractive for value investors.

Payoneer Global Inc.’s price-to-book ratio is lower than its peers. This could make Payoneer Global Inc. more attractive for value investors when compared to the industry median at 1.38.

You can read more about Payoneer Global 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.

Radian Group Inc.’s Value Grade

Value Grade:

Radian Group Inc., together with its subsidiaries, provides mortgage insurance in the United States. It aggregates, manages, and distributes mortgage credit risk for the benefit of mortgage lending institutions and mortgage credit investors through private mortgage insurance on residential first-lien mortgage loans. The company also offers private mortgage insurance, specialty insurance, and reinsurance lines. It serves mortgage originators, such as mortgage banks, commercial banks, savings institutions, credit unions, and community banks. The company was formerly known as CMAC Investment Corp. and changed its name to Radian Group Inc. in June 1999. Radian Group Inc. was founded in 1977 and is headquartered in Wayne, Pennsylvania.

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.

Radian Group Inc. has a Value Score of 79, which is considered to be undervalued.

Radian Group Inc.’s price-earnings ratio is 8.5 compared to the industry median at 14.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Radian Group Inc. more attractive for value investors.

Radian Group Inc.’s price-to-book ratio is higher than its peers. This could make Radian Group Inc. less attractive for value investors when compared to the industry median at 1.38.

You can read more about Radian Group 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.

Other Financial Services 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 Financial Services stocks as well as other industrys.

Choosing Which of the 6 Best Financial Services 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.

• Enact Holdings, Inc. stock has a Value Grade of A.
• Federal Agricultural Mortgage Corporation stock has a Value Grade of B.
• Alerus Financial Corporation stock has a Value Grade of B.
• MGIC Investment Corporation stock has a Value Grade of A.
• Payoneer Global Inc. stock has a Value Grade of B.
• Radian Group Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Financial Services 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 Financial Services Stocks

Want to learn more about Financial Services 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.

• 6 Undervalued Financial Services Stocks for Thursday, May 14
• Is Berkshire Hathaway Inc. (BRK.A) Overvalued?
• Is Mastercard Incorporated (MA) Overvalued?
• Is Visa Inc. (V) Overvalued?

AAII Disclaimer

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