Understanding Value Stocks
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.
Below is a list of notable value stocks in the utilities sector:
- China Recycling Energy CREG - P/E: 4.99
- Atlantic Power AT - P/E: 7.79
- Kenon Hldgs KEN - P/E: 3.48
- Suburban Propane Partners SPH - P/E: 8.6
China Recycling Energy has reported Q4 earnings per share at 1.7, which has increased by 780.0% compared to Q3, which was -0.25. China Recycling Energy does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Atlantic Power has reported Q1 earnings per share at 0.09, which has decreased by 70.0% compared to Q4, which was 0.3. Its most recent dividend yield is at 11.16%, which has increased by 5.83% from 5.33% in the previous quarter.
Most recently, Kenon Hldgs reported earnings per share at 2.69, whereas in Q3 earnings per share sat at 1.09. Kenon Hldgs does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Suburban Propane Partners's earnings per share for Q2 sits at 2.02, whereas in Q1, they were at 0.61. The company's most recent dividend yield sits at 8.12%, which has increased by 0.23% from 7.89% last quarter.
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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