American International Group Inc (AIG), JPMorgan Chase & Co. (JPM): Five Financial Stocks You Should Start Thinking About

Credit card stocks like Visa have been solid performers in the last year, but that company looks a bit pricy at 20 times forward earnings estimates. While Discover Financial Services (NYSE:DFS) doesn’t have Visa’s brand power, its P/Es- both on a trailing basis and for the fiscal year ending in November 2014- are both 10. With Discover Financial Services (NYSE:DFS) being that much cheaper than its larger peer, and with revenue and earnings both up moderately in its most recent quarterly report compared to the same period in the previous fiscal year, we think it meets all the criteria for a prospective value stock.

Capital One Financial Corp. (NYSE:COF) rounds out our list of intriguing financial stocks. Capital One combines a bank holding company and a credit card business. It too carries a moderate discount to book value. Though earnings per share did decline in 2012 as the company issued shares, this looks to have been caused primarily by M&A-related charges. Even if we allow those charges to hit earnings for the year, Capital One Financial Corp. (NYSE:COF) trades at only 9 times trailing earnings; analyst expectations for growth over the next several years imply a five-year PEG ratio of 0.9.

Certainly many of these financial stocks have considerable exposure to the broader market, so it’s not wise to go out and buy all of them if an investor is already long a number of high beta stocks.  However, each of them looks cheaply priced to us- either in terms of their trailing earnings, their book value, or both- and with their businesses on a solid footing as well, we think that they are good value stocks at this time.

Disclosure: I own no shares of any stocks mentioned in this article.