The performance of financial services shares has been rather mixed over the last five years. For instance, while Suncorp Group Ltd (ASX: SUN) has seen its share price rise by 75%, others such as AMP Limited (ASX: AMP) have fallen by 10% over the same period.
Of course it's not all been extreme performance in the sector. National Australia Bank Ltd. (ASX: NAB) has largely tracked the ASX over the last five years and is up a solid (if rather disappointing) 13%.
However these three stocks could be worth buying right now. Here's why.
National Australia Bank
With a fat, fully franked yield of 5.8%, NAB is a top notch income play. Furthermore, with the bank's bottom line set to grow at an annualised rate of 6.2% over the next two years, it means that dividend per share increases should be well ahead of inflation.
Moreover, dividends are well-covered at 1.3 times and this shows that the current yield and its growth rate are very sustainable. With shares in the bank trading on a price-earnings (P/E) ratio of 13, they seem to offer reasonable value when the ASX's P/E is 15.6.
Suncorp Group
The next two financial years are set to be something of a purple patch for Suncorp. That's because in FY 2016, the group's bottom line is expected to be an incredible 90% higher than it was in FY 2014.
This means that the fully franked yield of 5.9% should continue to remain relatively high and be well-covered over the medium term. With shares in the bank trading on a P/E ratio of 21.3, they may at first glance appear overpriced. However, such a strong potential growth rate equates to a price to earnings growth (PEG) ratio of just 0.56, which is very low.
AMP Limited
Despite only being partially franked, AMP's 4.4% yield is still attractive. As with Suncorp and NAB, earnings growth potential is strong, with AMP's bottom line expected to be 73% higher in FY 2015 than it was in FY 2013.
As with Suncorp, a relatively high P/E ratio of 17.8 does not paint the full picture, with a PEG ratio of 0.56 doing a much better job of highlighting the value, as well as growth and income potential that may lie ahead for investors in AMP.
