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.
The following stocks are considered to be notable value stocks in the utilities sector:
- Suburban Propane Partners SPH - P/E: 7.87
- NRG Energy NRG - P/E: 4.27
- Kenon Hldgs KEN - P/E: 4.1
- China Recycling Energy CREG - P/E: 2.94
- Pampa Energia PAM - P/E: 2.91
Suburban Propane Partners has reported Q4 earnings per share at -0.19, which has decreased by 18.75% compared to Q3, which was -0.16. Its most recent dividend yield is at 8.14%, which has decreased by 0.42% from 8.56% in the previous quarter.
NRG Energy has reported Q3 earnings per share at 6.6, which has increased by 50.0% compared to Q2, which was 4.4. Its most recent dividend yield is at 3.13%, which has decreased by 0.2% from 3.33% in the previous quarter.
Kenon Hldgs saw an increase in earnings per share from 3.2 in Q2 to 3.45 now. China Recycling Energy saw an increase in earnings per share from -0.16 in Q2 to -0.08 now. This quarter, Pampa Energia experienced an increase in earnings per share, which was 1.94 in Q2 and is now 2.36.
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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