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.
Below is a list of notable value stocks in the energy sector:
- PDC Energy PDCE - P/E: 4.04
- SilverBow Resources SBOW - P/E: 1.96
- Dorchester Minerals DMLP - P/E: 8.68
- Arch Resources ARCH - P/E: 2.81
- BP Prudhoe Bay BPT - P/E: 4.09
PDC Energy has reported Q3 earnings per share at $3.77, which has decreased by 26.22% compared to Q2, which was 5.11. Most recently, the company reported a dividend yield of 2.06%, which has increased by 0.08% from last quarter's yield of 1.98%.
SilverBow Resources's earnings per share for Q3 sits at $6.29, whereas in Q2, they were at 4.95. Dorchester Minerals has reported Q3 earnings per share at $0.88, which has decreased by 8.33% compared to Q2, which was 0.96. The company's most recent dividend yield sits at 15.1%, which has increased by 0.81% from 14.29% last quarter.
This quarter, Arch Resources experienced a decrease in earnings per share, which was $19.75 in Q2 and is now $8.68. Most recently, BP Prudhoe Bay reported earnings per share at $1.41, whereas in Q2 earnings per share sat at $1.09. Most recently, the company reported a dividend yield of 20.68%, which has decreased by 5.89% from last quarter's yield of 26.57%.
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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