What Defines a Value Stock?
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 financial services sector that may be worth watching:
- Home Point Capital HMPT - P/E: 1.15
- Meridian MRBK - P/E: 5.03
- Great Elm Capital GECC - P/E: 2.91
- FNCB Bancorp FNCB - P/E: 8.38
- Alerus Financial ALRS - P/E: 9.71
Home Point Capital saw a decrease in earnings per share from 0.52 in Q1 to -0.36 now. Home Point Capital does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Meridian has reported Q2 earnings per share at 1.33, which has decreased by 19.39% compared to Q1, which was 1.65. Most recently, the company reported a dividend yield of 1.95%, which has decreased by 0.08% from last quarter's yield of 2.03%.
Great Elm Capital saw an increase in earnings per share from 0.06 in Q1 to 0.09 now. Its most recent dividend yield is at 11.49%, which has decreased by 0.71% from 12.2% in the previous quarter.
FNCB Bancorp has reported Q2 earnings per share at 0.26, which has decreased by 10.34% compared to Q1, which was 0.29. Its most recent dividend yield is at 4.03%, which has increased by 0.66% from 3.37% in the previous quarter.
This quarter, Alerus Financial experienced a decrease in earnings per share, which was 0.86 in Q1 and is now 0.66. Most recently, the company reported a dividend yield of 2.21%, which has decreased by 0.03% from last quarter's yield of 2.24%.
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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