What are 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.
Benzinga Insights has compiled a list of value stocks in the basic materials sector that may be worth watching:
- Gerdau GGB - P/E: 5.55
- Valhi VHI - P/E: 9.46
- Nexa Resources NEXA - P/E: 7.75
- Equinox Gold EQX - P/E: 4.39
- ArcelorMittal MT - P/E: 4.56
Gerdau saw an increase in earnings per share from 0.26 in Q1 to 0.35 now. The company's most recent dividend yield sits at 6.96%, which has increased by 1.94% from 5.02% last quarter.
Valhi's earnings per share for Q2 sits at 0.75, whereas in Q1, they were at 0.52. Most recently, the company reported a dividend yield of 1.51%, which has increased by 0.28% from last quarter's yield of 1.23%.
This quarter, Nexa Resources experienced an increase in earnings per share, which was 0.17 in Q1 and is now 0.82. Its most recent dividend yield is at 2.62%, which has decreased by 1.75% from 4.37% in the previous quarter.
Equinox Gold's earnings per share for Q2 sits at 0.01, whereas in Q1, they were at -0.02. Equinox Gold does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
This quarter, ArcelorMittal experienced an increase in earnings per share, which was 1.93 in Q1 and is now 3.46. The company's most recent dividend yield sits at 0.77%, which has decreased by 0.31% from 1.08% 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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