The Meaning Behind Value Stocks
A value stock is traditionally defined in terms of how investors in the marketplace are valuing that company's future growth prospects. Low P/E multiples are good base indicators that the company is undervalued and can most likely be labelled as a value stock.
Below is a list of notable value stocks in the financial services sector:
- Alerus Financial ALRS - P/E: 9.39
- Santander Consumer USA SC - P/E: 6.58
- US Global Investors GROW - P/E: 6.2
- Grupo Aval Acciones AVAL - P/E: 9.96
- Athene Holding ATH - P/E: 7.32
Alerus Financial's earnings per share for Q1 sits at 0.86, whereas in Q4, they were at 0.57. The company's most recent dividend yield sits at 2.13%, which has decreased by 0.26% from 2.39% last quarter.
Santander Consumer USA's earnings per share for Q1 sits at 2.42, whereas in Q4, they were at 1.7. Its most recent dividend yield is at 2.61%, which has decreased by 0.59% from 3.2% in the previous quarter.
This quarter, US Global Investors experienced an increase in earnings per share, which was 0.13 in Q1 and is now 1.1. Its most recent dividend yield is at 0.76%, which has ('', 'not changed') by 0.0% from 0.76% in the previous quarter.
Grupo Aval Acciones looks to be undervalued. It possesses an EPS of 0.01, which has not changed since last quarter (Q3). The company's most recent dividend yield sits at 4.22%, which has decreased by 0.84% from 5.06% last quarter.
Athene Holding saw a decrease in earnings per share from -0.04 in Q3 to -0.11 now. Athene Holding 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.
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