Every time the economy improves the outlook for financial companies is better because they write off less loans or as long as people can repay their debts, the better for the financial sector. The better the economy, the more loans that are offered by the banks which is good for small and medium sized businesses who consistently bear the restraint when a bank is under pressure. Ryan Gottschalk of Thomson Reuters examined the financial sector to see if there were potential bargains.

we used the Thomson Reuters Eikon database to find companies trading less than book value. Book value is determined by dividing the total market capitalization by the net assets of the company. Anything less than 1.0 is worth looking at.

price of the shares in early November.

companies need to have a long-term EPS growth consensus estimate of 5% over the next 3 years.

the dividend increase must be at least 5% over the past year.

Company                      Recent Mkt          Mkt Cap    Book Value    P/BV  Est EPS   Div Per   Div

Close                        ($bil)                                            Growth  Sh Grow  Yield

Bank of America       17.01                     171.886        256,176        0.67       8.0      24.9           1.47

American Intl           59.28                     60.888          89,658       0.68      17.9     51.9            2.11

CNO Financial          16.06                         2,812             4,138        0.68      7.7      14.8            1.93

Legg Mason               29.25                          2,954             4,213        0.70    13.6    10.7            3.02

Citizens Financial    27.35                        13,999            19,646     0.71       9.9    12.5             1.67

Capital One Fin          74.84                      36.095            47,284    0.76      5.7       6.7             2.14

Metlife                           47.97                    52,725              67,949   0.76       8.3      7.7              3.32

Regions Financial       10.96                     13.491              16,844    0.80      5.4    13.3               2.38

XL Group                        35.30                       9,497             11,677    0.81      16.0   11.7               2.27

Morgan Stanley            34.0                      63.675            75,182      0.85       9.5   26.7              2.09

Linking to dividend paying stocks, Mr. Gottschalk list has a few more entries but the closer to 1.o they are, the greater they are fully valued. The opportunity of the above is to see why for example Bank of America is trading at a rate which looks like a bargain. If the company goes to fully valued or 1.0 the stock price will rise and you will be paid a dividend with relatively low risk. Similar to the Presidential election your research why tell you why this is great stock and why it is not performing as well as can be expected.

There are more questions than answers, till the next time – to raising questions.