What are Value Stocks?
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.
Below is a list of notable value stocks in the financial services sector:
- The Western Union WU - P/E: 7.15
- CNB Financial CCNE - P/E: 8.47
- Bank of Montreal BMO - P/E: 7.39
- Rocket Companies RKT - P/E: 8.43
- CrossFirst Bankshares CFB - P/E: 9.92
The Western Union has been featured as a value stock. The Western Union's Q2 EPS sits at $0.51, which has not changed since last quarter (Q1). The company's most recent dividend yield sits at 5.75%, which has increased by 0.27% from 5.48% last quarter.
CNB Financial's earnings per share for Q2 sits at $0.85, whereas in Q1, they were at 0.84. Most recently, the company reported a dividend yield of 2.68%, which has decreased by 0.17% from last quarter's yield of 2.85%.
Most recently, Bank of Montreal reported earnings per share at $2.55, whereas in Q1 earnings per share sat at $3.07. Most recently, the company reported a dividend yield of 4.18%, which has decreased by 0.49% from last quarter's yield of 4.67%.
This quarter, Rocket Companies experienced a decrease in earnings per share, which was $0.15 in Q1 and is now $-0.03. CrossFirst Bankshares saw a decrease in earnings per share from 0.33 in Q1 to $0.31 now.
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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