What is 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.
Below is a list of notable value stocks in the financial services sector:
- Freedom Holding FRHC - P/E: 6.59
- Banner BANR - P/E: 9.88
- Peoples Financial Servs PFIS - P/E: 8.53
- Berkshire Hills Bancorp BHLB - P/E: 9.97
- X Financial XYF - P/E: 1.37
Most recently, Freedom Holding reported earnings per share at $0.85, whereas in Q2 earnings per share sat at $3.44. Banner has reported Q1 earnings per share at $1.33, which has decreased by 9.52% compared to Q4, which was 1.47. Most recently, the company reported a dividend yield of 3.06%, which has increased by 0.36% from last quarter's yield of 2.7%.
This quarter, Peoples Financial Servs experienced an increase in earnings per share, which was $0.95 in Q4 and is now $1.33. Its most recent dividend yield is at 3.14%, which has decreased by 0.02% from 3.16% in the previous quarter.
Berkshire Hills Bancorp's earnings per share for Q1 sits at $0.43, whereas in Q4, they were at 0.42. Its most recent dividend yield is at 1.9%, which has increased by 0.25% from 1.65% in the previous quarter.
X Financial's earnings per share for Q1 sits at $0.43, whereas in Q4, they were at 0.51.
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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