Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 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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5 Undervalued Financial Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 5 undervalued stocks in the Financial Services industry for Wednesday, July 29, 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.

Fiserv, Inc.’s Value Grade

Value Grade:

Fiserv, Inc. provides payments and financial services technology solutions in the United States, Europe, the Middle East and Africa, Latin America, the Asia-Pacific, and internationally. It operates through the Merchant Solutions and Financial Solutions segments. The Merchant Solutions segment offers merchant acquiring and digital commerce services; mobile payment services; security and fraud protection solutions; stored-value solutions; software-as-a-service; POS devices; and pay-by-bank solutions. Its Financial Solutions segment provides digital payments, including debit card processing services, debit network services, security and fraud protection products, bill payment, person-to-person payments, and account-to-account transfers; issuing services comprising credit card processing services, prepaid card processing services, card production services, print services, government payment processing, and student loan processing; and banking services, such as customer loan and deposit account processing, digital banking, financial and risk management, professional services and consulting, and check processing services. The company serves merchants, banks, credit unions, other financial institutions, corporate, and public sector customers. The company has a strategic alliance with Western Alliance Bancorporation. Fiserv, Inc. was incorporated in 1984 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.

Fiserv, Inc. has a Value Score of 89, which is considered to be undervalued.

When you look at Fiserv, Inc.’s price-to-sales ratio at 1.41 compared to the industry median at 2.07, this company has a lower price relative to revenue compared to its peers. This could make Fiserv, Inc.’s stock more attractive for value investors.

Fiserv, Inc.’s price-earnings ratio is 9.20 compared to the industry median at 15.40. This means it has a lower share price relative to earnings compared to its peers. This could make Fiserv, Inc. more attractive for value investors.

Now, let’s assess Fiserv, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 12.6, when compared to the industry median of 9.5, the company may be considered overvalued 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. Fiserv, Inc.’s shareholder yield is higher than its industry median ratio of 0.10%. 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. Fiserv, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.40. This could make Fiserv, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Fiserv, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Fiserv, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 13.10. This could make Fiserv, Inc. more attractive because the lower P/FCF ratio indicates that Fiserv, 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 Home Loan Mortgage Corporation’s Value Grade

Value Grade:

Federal Home Loan Mortgage Corporation operates in the secondary mortgage market in the United States. The company operates through two segments: Single-Family and Multifamily. The Single-Family segment purchases, securitizes, and guarantees single-family loans; and manages single-family mortgage credit and market risk, as well as manages mortgage-related investments portfolio, single-family securitization activities, and treasury functions. This segment also serves mortgage banking companies, commercial banks, regional banks, community banks, credit unions, HFAs, savings institutions, and non-depository institutions. The Multifamily segment engages in the purchase, securitization, and guarantee of multifamily loans; issuance of multifamily K certificates; manages multifamily mortgage credit and market risk; and invests in multifamily loans and mortgage-related securities. It also serves banks and other depository institutions, insurance companies, money managers, central banks, pension funds, state and local governments, REITs, non-depository institutions, and brokers and dealers. Federal Home Loan Mortgage Corporation was incorporated in 1970 and is headquartered in McLean, 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.

Federal Home Loan Mortgage Corporation has a Value Score of 90, which is considered to be undervalued.

You can read more about Federal Home Loan 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.

Merchants Bancorp’s Value Grade

Value Grade:

Merchants Bancorp operates as the diversified bank holding company in the United States. It operates through three segments: Multi-family Mortgage Banking, Mortgage Warehousing, and Banking. The Multi-family Mortgage Banking segment engages in the mortgage banking, which originates, and services government sponsored mortgages, including bridge financing products to refinance, acquire, or reposition multi-family housing projects, and construction lending for housing development and healthcare facilities financing. This segment also offers customized loan products for need-based skilled nursing facilities, such as independent living, assisted living, and memory care; and tax credit equity syndicator service. The Mortgage Warehousing segment funds agency eligible residential loans, as well as commercial loans to non-depository financial institutions. The Banking segment offers a range of financial products and services to consumers and businesses, which includes retail banking, commercial lending, agricultural lending, retail and correspondent residential mortgage banking, and small business administration lending. Merchants Bancorp was founded in 1990 and is headquartered in Carmel, Indiana.

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.

Merchants Bancorp has a Value Score of 64, which is considered to be undervalued.

Merchants Bancorp’s price-earnings ratio is 11.9 compared to the industry median at 15.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Merchants Bancorp more attractive for value investors.

Merchants Bancorp’s price-to-book ratio is higher than its peers. This could make Merchants Bancorp less attractive for value investors when compared to the industry median at 1.40.

You can read more about Merchants Bancorp’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.

NewtekOne, Inc.’s Value Grade

Value Grade:

NewtekOne, Inc. operates as the bank holding company for Newtek Bank, National Association that provides various business and financial solutions under the Newtek and NewtekOne brands to the small- and medium-sized business market. The company accepts demand, savings, NOW, money market, and time deposits; and provides loans including the United States small business administration loans, commercial and industrial loans, and commercial real estate loans. It is also involved in the provision of electronic payment processing services comprising credit and debit card processing services, check approval services, processing equipment, and software, as well as cloud-based point of sale systems for various restaurants, retail, assisted living, taxi cabs, parks, and golf course businesses. In addition, it offers wholesale brokerage insurance agency services; and payroll management, and related payment and tax reporting services to independent business owners, as well as inbound and outbound calling services. The company was formerly known as Newtek Business Services Corp. and changed its name to NewtekOne, Inc. in January 2023. NewtekOne, Inc. was founded in 1998 and is headquartered in Boca Raton, 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.

NewtekOne, Inc. has a Value Score of 85, which is considered to be undervalued.

NewtekOne, Inc.’s price-earnings ratio is 6.6 compared to the industry median at 15.4. This means that it has a lower price relative to its earnings compared to its peers. This makes NewtekOne, Inc. more attractive for value investors.

NewtekOne, Inc.’s price-to-book ratio is higher than its peers. This could make NewtekOne, Inc. less attractive for value investors when compared to the industry median at 1.40.

You can read more about NewtekOne, 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.

StoneCo Ltd.’s Value Grade

Value Grade:

StoneCo Ltd. provides financial technology and software solutions to merchants and integrated partners to conduct electronic commerce across in-store, online, and mobile channels in Brazil. The company provides financial services, including payment, prepayment, digital banking, and credit solutions. It offers payment solutions of electronic payments and alternative payment methods, such as payment slips and Pix transactions; digital product to help merchants improve their consumers’ experience, which include split-payment processing, multi-payment processing, and recurring payments for subscriptions; and tap on phone solution. In addition, the company provides prepayment; digital banking; and credit solution. The company serves online, offline, and omni-channel sales clients under Stone, tonstone, and paggar.me. StoneCo Ltd. was founded in 2012 and is based in George Town, the Cayman Islands.

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.

StoneCo Ltd. has a Value Score of 99, which is considered to be undervalued.

StoneCo Ltd.’s price-earnings ratio is 4.3 compared to the industry median at 15.4. This means that it has a lower price relative to its earnings compared to its peers. This makes StoneCo Ltd. more attractive for value investors.

StoneCo Ltd.’s price-to-book ratio is higher than its peers. This could make StoneCo Ltd. less attractive for value investors when compared to the industry median at 1.40.

You can read more about StoneCo Ltd.’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 5 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.

• Fiserv, Inc. stock has a Value Grade of A.
• Federal Home Loan Mortgage Corporation stock has a Value Grade of A.
• Merchants Bancorp stock has a Value Grade of B.
• NewtekOne, Inc. stock has a Value Grade of A.
• StoneCo Ltd. stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 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.

• 5 Undervalued Financial Services Stocks for Tuesday, July 28
• Is Enact Holdings, Inc. (ACT) Overvalued?
• Is Klarna Group plc (KLAR) Overvalued?
• Is MGIC Investment Corporation (MTG) Overvalued?

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.