What Defines a Value Stock?
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.
The following stocks are considered to be notable value stocks in the energy sector:
- Barnwell Industries BRN - P/E: 4.52
- Crescent Point Energy CPG - P/E: 1.6
- Sunoco SUN - P/E: 7.61
- China Petroleum SNP - P/E: 3.79
- Transportadora de Gas TGS - P/E: 9.95
This quarter, Barnwell Industries experienced a decrease in earnings per share, which was 0.59 in Q3 and is now 0.16. Crescent Point Energy saw an increase in earnings per share from 0.16 in Q2 to 0.19 now. Its most recent dividend yield is at 3.16%, which has increased by 0.4% from 2.76% in the previous quarter.
Sunoco saw a decrease in earnings per share from 1.73 in Q2 to 1.0 now. Its most recent dividend yield is at 7.91%, which has decreased by 1.18% from 9.09% in the previous quarter.
China Petroleum has reported Q3 earnings per share at 2.64, which has increased by 0.38% compared to Q2, which was 2.63. Its most recent dividend yield is at 10.47%, which has increased by 3.82% from 6.65% in the previous quarter.
Transportadora de Gas's earnings per share for Q3 sits at 0.3, whereas in Q2, they were at 0.24. Its most recent dividend yield is at 3.71%, which has ('', 'not changed') by 0.0% from 3.71% in the previous 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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