The Meaning Behind 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 energy sector:
- APA APA - P/E: 8.83
- Teekay LNG Partners TGP - P/E: 6.37
- VAALCO Energy EGY - P/E: 6.62
- Camber Energy CEI - P/E: 0.02
- Adams Resources & Energy AE - P/E: 7.72
Most recently, APA reported earnings per share at 0.7, whereas in Q1 earnings per share sat at 0.91. Most recently, the company reported a dividend yield of 0.49%, which has decreased by 0.12% from last quarter's yield of 0.61%.
This quarter, Teekay LNG Partners experienced a decrease in earnings per share, which was 0.61 in Q1 and is now 0.57. Most recently, the company reported a dividend yield of 7.99%, which has increased by 0.14% from last quarter's yield of 7.85%.
VAALCO Energy saw a decrease in earnings per share from 0.15 in Q1 to 0.14 now. VAALCO Energy does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
This quarter, Camber Energy experienced an increase in earnings per share, which was -0.44 in Q1 and is now -0.19. Camber Energy does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Most recently, Adams Resources & Energy reported earnings per share at 0.44, whereas in Q1 earnings per share sat at -0.61. The company's most recent dividend yield sits at 3.56%, which has decreased by 0.04% from 3.6% 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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