The Meaning Behind 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 consumer defensive sector:
- Ingles Markets IMKTA - P/E: 7.03
- Amcon Distributing DIT - P/E: 5.9
- Industrias Bachoco SAB IBA - P/E: 7.3
- Mannatech MTEX - P/E: 9.78
- Post Holdings POST - P/E: 7.83
Ingles Markets has reported Q4 earnings per share at $3.69, which has increased by 3.36% compared to Q3, which was 3.57. The company's most recent dividend yield sits at 0.81%, which has increased by 0.05% from 0.76% last quarter.
Amcon Distributing has reported Q4 earnings per share at $7.97, which has decreased by 22.4% compared to Q3, which was 10.27. Its most recent dividend yield is at 0.38%, which has increased by 0.01% from 0.37% in the previous quarter.
Industrias Bachoco SAB's earnings per share for Q3 sits at $0.97, whereas in Q2, they were at 2.94. Its most recent dividend yield is at 2.28%, which has increased by 0.23% from 2.05% in the previous quarter.
Mannatech has reported Q3 earnings per share at $0.61, which has increased by 79.41% compared to Q2, which was 0.34. The company's most recent dividend yield sits at 3.77%, which has increased by 0.57% from 3.2% last quarter.
This quarter, Post Holdings experienced an increase in earnings per share, which was $0.69 in Q3 and is now $0.85. The company's most recent dividend yield sits at 6.43%, which has increased by 0.76% from 5.67% 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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