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.
Benzinga Insights has compiled a list of value stocks in the financial services sector that may be worth watching:
- Diamond Hill Investment DHIL - P/E: 9.84
- Bain Capital Specialty BCSF - P/E: 5.46
- CNO Finl Group CNO - P/E: 7.98
- Merchants Bancorp MBIN - P/E: 6.36
- Itau Unibanco Holding ITUB - P/E: 8.6
Diamond Hill Investment has reported Q3 earnings per share at 8.03, which has increased by 80.86% compared to Q2, which was 4.44. Diamond Hill Investment does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Bain Capital Specialty looks to be undervalued. It possesses an EPS of 0.34, which has not changed since last quarter (Q2). Most recently, the company reported a dividend yield of 8.77%, which has decreased by 0.2% from last quarter's yield of 8.97%.
CNO Finl Group's earnings per share for Q3 sits at 0.72, whereas in Q2, they were at 0.66. Its most recent dividend yield is at 2.23%, which has increased by 0.3% from 1.93% in the previous quarter.
Merchants Bancorp has reported Q3 earnings per share at 1.83, which has increased by 15.82% compared to Q2, which was 1.58. Its most recent dividend yield is at 1.02%, which has increased by 0.18% from 0.84% in the previous quarter.
Itau Unibanco Holding has reported Q3 earnings per share at 0.11, which has decreased by 15.38% compared to Q2, which was 0.13. The company's most recent dividend yield sits at 0.73%, which has increased by 0.12% from 0.61% 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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