A Look Into Basic Materials Sector Value Stocks

Understanding 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.

The following stocks are considered to be notable value stocks in the basic materials sector:

  1. Tronox Holdings TROX - P/E: 3.81
  2. CVR Partners UAN - P/E: 4.71
  3. Centerra Gold CGAU - P/E: 1.32
  4. ICL Group ICL - P/E: 5.04
  5. Mercer Intl MERC - P/E: 2.68

Tronox Holdings saw a decrease in earnings per share from 0.84 in Q2 to $0.69 now. The company's most recent dividend yield sits at 4.17%, which has increased by 0.95% from 3.22% last quarter.

CVR Partners's earnings per share for Q3 sits at $-1.87, whereas in Q2, they were at 11.12. Its most recent dividend yield is at 5.82%, which has decreased by 30.92% from 36.74% in the previous quarter.

Centerra Gold has reported Q3 earnings per share at $-0.06, which has increased by 50.0% compared to Q2, which was -0.12. Most recently, the company reported a dividend yield of 5.97%, which has increased by 1.54% from last quarter's yield of 4.43%.

This quarter, ICL Group experienced a decrease in earnings per share, which was $0.58 in Q2 and is now $0.49. Its most recent dividend yield is at 11.12%, which has decreased by 1.13% from 12.25% in the previous quarter.

Most recently, Mercer Intl reported earnings per share at $1.0, whereas in Q2 earnings per share sat at $1.07. The company's most recent dividend yield sits at 2.06%, which has increased by 0.18% from 1.88% last quarter.

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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