Despite mostly mixed Q4 results from big banks last week, the finance sector is offering several stand-out opportunities. Financial industries are capturing attention, with a range of finance stocks currently holding spots on the Zacks Rank #1 (Strong Buy) list. Not only are these financial companies undervalued, but they also offer dividend yields over 5%, representing an attractive investment prospect.
Investment Management Firms
AllianceBernstein AB and Janus Henderson Group JHG are two wealth management players worth considering, as the Zacks Financial-Investment Management Industry ranks in the top 24% of over 250 Zacks industries.
AllianceBernstein
Private wealth management leader AllianceBernstein offers an attractive 7.99% annual dividend yield. The company’s shares are trading at a forward earnings multiple of 10.8X, still at discounts to its historical highs, making it a compelling option for income investors. Additionally, despite expected earnings decline for FY23, AllianceBernstein’s forecasted rebound in FY24 earnings presents a promising picture for growth.
Janus Henderson Group
Janus Henderson’s stock trades at a reasonable 11.5X forward earnings multiple and offers a 5.47% annual dividend yield. Despite an expected earnings decrease for FY23, the company’s forecasted stabilization and rise in earnings for this year provide potential for income investors.
Regional Banks
Citizens & Northern Corp CZNC and Financial Institutions’ FISI are two regional banks standing out for their attractive valuations and sizable dividend yields. Operating through its banking subsidiary Five Star Bank, Financial Institutions’ presence expands through Western and Central New York.
Citizens & Northern Corp
Citizens & Northern Corp trades at a reasonable 12.3X forward earnings multiple and offers a 5.63% annual dividend yield, beating the industry average. The company’s branches throughout Pennsylvania make it a compelling option for income investors.
Financial Institutions
Financial Institutions’ 5.61% dividend yield tops the industry average, and with shares trading at just 6.7X forward earnings, it presents an appealing opportunity for income investors. The company’s history of dividend increases and low payout ratio further enhance its attractiveness.
Bottom Line
These finance stocks, with their Zacks Rank #1 (Strong Buy) status, are receiving positive earnings estimate revisions for fiscal 2024. With strengthened outlooks for their respective industries, they present lucrative opportunities for income investors.