Jefferies Financial Group (JEF) is a bargain now that it released its Q3 fiscal earnings on Sept. 28 for the quarter ending Aug. 31. Here's what impresses me about the company and the stock

• Tangible book value grew slightly to $8.418 billion and $33.81 per share (TBVPS) on a fully diluted basis.
• However, since there are now 228.99 million shares outstanding (based on the 10-Q released on Oct. 7), the actual TBVPS, before dilution, it's $36.76 per share (i.e., $8,418m / 228.92m). Most financial stocks are showing lower TBVPS.
• The stock, at $31.18 on Oct. 11, is trading for 92% of diluted TBVPS and 85% of actual TBVPS.
• Free cash flow is an astounding $1.315 billion for the nine months to Aug. 31, or 28.4% of its revenue. This is a very high FCF margin.
• The company bought back 4.3 million shares of common stock for $134.1 million, or an average price of $31.39 per share, including 0.6 million shares repurchased after quarter end through September 27, 2022. That implies that its buybacks for the quarter were 1.65% of its total diluted shares. That works out to be an annualized rate of 6.6% of its total shares annually, giving it a buyback yield of 6.60%.
• The company has now paid 4 quarterly dividends of 30 cents, or $1.20 annually. That gives the stock an annualized yield of 3.85%. But if the company raises the dividend next quarter the yield will be even higher. One reason this might happen is the company has raised its dividend every year for the past 5 years.

Moreover, the company said it plans on spinning off its shares in Vitesse Energy by the end of the year. This is an oil and gas property holding company that also owns royalties and working assets. This should be a boon for investors since the company is profitable.

Analysts now forecast that Jefferies will make $3.21 for the year ending Nov. 30, and it's higher at $3.84 for the year ending Nov. 2023. So at today's price of $31.18, JEF stock trades for just 8.1x forward earnings forecasts.

Most of the company's earnings come from its investment banking activities which have taken a hit so far this year. But the stock already reflects this bad news.

The bottom line is that this is a bargain stock with a potentially higher dividend, trading below TBVPS, 8x earnings, a 3.85% yield, and an upcoming spinoff.

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