Understanding 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 utilities sector that may be worth watching:
- NRG Energy NRG - P/E: 2.77
- Central Puerto CEPU - P/E: 6.66
- Pampa Energia PAM - P/E: 3.74
- Suburban Propane Partners SPH - P/E: 5.56
- Genie Energy GNE - P/E: 3.57
NRG Energy saw a decrease in earnings per share from 7.17 in Q1 to $2.16 now. Its most recent dividend yield is at 3.92%, which has increased by 0.39% from 3.53% in the previous quarter.
Central Puerto's earnings per share for Q2 sits at $0.13, whereas in Q1, they were at 0.3. Pampa Energia has reported Q2 earnings per share at $1.2, which has decreased by 32.96% compared to Q1, which was 1.79. Suburban Propane Partners saw a decrease in earnings per share from 2.74 in Q2 to $-0.04 now. Its most recent dividend yield is at 8.18%, which has increased by 0.61% from 7.57% in the previous quarter.
Genie Energy's earnings per share for Q2 sits at $1.3, whereas in Q1, they were at 0.67. Most recently, the company reported a dividend yield of 3.33%, which has decreased by 1.39% from last quarter's yield of 4.72%.
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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