5 Value Stocks To Watch In The Basic Materials Sector

What is a Value Stock?

A value stock traditionally has a lower price when compared to stock prices of companies in the same industry. This indicates that the company may be undervalued, as investors are not expressing as much interest in such companies. The most commonly used way to check for value is with the price-to-earnings multiple, or P/E. A low P/E multiple is a good indication that the stock is undervalued.

Benzinga Insights has compiled a list of value stocks in the basic materials sector that may be worth watching:

1. Commercial Metals (NYSE:CMC) - P/E: 9.51
2. Vale (NYSE:VALE) - P/E: 3.71
3. Westlake Chemical (NYSE:WLK) - P/E: 8.04
4. West Fraser Timber (NYSE:WFG) - P/E: 3.02
5. Constellium (NYSE:CSTM) - P/E: 8.16

This quarter, Commercial Metals experienced an increase in earnings per share, which was 1.04 in Q3 and is now 1.26. Its most recent dividend yield is at 1.74%, which has increased by 0.27% from 1.47% in the previous quarter.

Vale has reported Q3 earnings per share at 1.22, which has decreased by 18.12% compared to Q2, which was 1.49. Vale does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Most recently, Westlake Chemical reported earnings per share at 4.69, whereas in Q2 earnings per share sat at 4.04. Most recently, the company reported a dividend yield of 1.17%, which has decreased by 0.23% from last quarter's yield of 1.4%.

West Fraser Timber saw a decrease in earnings per share from 12.32 in Q2 to 4.2 now. West Fraser Timber does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Constellium's earnings per share for Q3 sits at 0.77, whereas in Q2, they were at 0.88. Constellium does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

The Significance: A value stock may need some time to rebound from its undervalued position. The risk of investing in a value stock is that this emergence may never materialize.