LONDON -- This article is the latest in a series that aims to help novice investors with the stock market. To enjoy past articles in the series, please visit our full archive.

A lot of investors go for diversification, and it can make a lot of sense; if one sector goes through a bad patch, being diversified into others can help offset the pain. But at the same time, diversifying for the sake of it can be a bad move.

But there's one sector that is very much in the throes of a recovery, and that's finance -- and we haven't considered it so far. But what possibilities are there? Well, I've been eyeing up a couple of giants in the insurance sector, which really hasn't been showing much in the way of gains yet...

Aviva (LSE:AV) (OTC:AVVIY) has results coming out on Thursday, and the City is currently expecting a dividend yield of 7.3% for the year to December 2012 based on the current share price of 349 pence. But earnings forecasts are all over the place, with individual analysts guessing at wildly different figures, so it's anybody's guess whether such a payout would be covered.

Asset valuations are pretty important as well, so I've added two more figures to our table below, with entries just for the two insurers. NAV is net asset value per share -- the book value of all the company's assets divided by the number of shares in issue. PBV, or price to book value, is the share price divided by the NAV.

From this, we can see that Aviva shares trade for less than their net asset value, which is a good sign, but we'll need to watch out for that come results time.

The other is RSA Insurance Group (LSE:RSA), whose shares shares trade in excess of asset value at the moment -- not outrageously so, but RSA is in second place to Aviva on that measure.

RSA has already brought us full-year results -- and slashed its final dividend by a third! And the share price slumped by 15% in response. But the overall full-year yield is still a nice 5.8%, based on today's price of 120p.

The fear, or course, is that Aviva will follow suit and cut its dividend, and the current share price does seem to factor in some of that possibility. We'll know later this week.

Meanwhile, here's our updated watchlist, with the two new entries -- and I've sorted it into alphabetical order this time:

CompanyMarket CapPriceForward P/ENAVPBVForward Dividend
Aviva £10.5 bn 349p 8.2 442p 0.8 7.3%
Daisy Group £286m 105p 8.1     1.3%
GKN £4.40bn 276p 10.0     3%
Ricardo £204m 401p 11.9     3.4%
RSA £4.29bn 120p 9.5 108p 1.1 6.2%
Trinity Mirror £292m 118p 3.9     0%
TUI Travel £3.55bn 310p 11.5     4%
Unilever £34.1bn 2,664p 18.7     3.2%
United Utilities £5.04bn 745p 18.3     4.6%
WS Atkins £892m 870p 11.4     3.5%

Since our last look in January, quite a few have moved -- mostly upward!

What of the rest?
Out of the list, I've definitely lost interest in Unilever (LSE:ULVR), with the shares having risen 9.7% since we last looked. On a forward price-to-earnings (P/E) ratio of nearly 19 now, it seems fully valued to me. And that 3.2% dividend is nothing to shout about, so I can only reiterate my "don't buy" stance. In other times, I might have bought Unilever at this level, but I think there are just too many better bargains out there right now.

GKN (LSE:GKN) reported strong results last week. Sales for the year to December were up 13%, adjusted pre-tax profit was up 19%, earnings per share up 17%, and the dividend was lifted to 7.2p per share for a modest 2.6% yield on the latest price of 276 pence. That's not a great yield, and there is only one slot left to fill in the portfolio -- and GKN shares are already up 13% from last time.

So what will fill our slot? We'll be deciding pretty shortly.

Finally, as you know, I consider income from dividends to be a core part of a long-term portfolio -- whether you take the income as cash or reinvest it in more shares, there's nothing wrong with good old cash, whatever your strategy.

And that's why I recommend the latest Fool report, "The Motley Fool's Top Income Share For 2013," in which our top analysts identify a share that they believe will provide handsome dividend income for years to come.

But it will only be available for a limited period, so click here to get your copy today.

I also think you should get a copy of "What Every New Investor Needs to Know," as it really does help beginners with some of the basics.