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:
- Rocket Companies RKT - P/E: 9.54
- Bank OZK OZK - P/E: 9.09
- Synchrony Finl SYF - P/E: 5.23
- Summit Finl Gr SMMF - P/E: 6.48
- United Security UBFO - P/E: 8.84
Rocket Companies's earnings per share for Q3 sits at $-0.08, whereas in Q2, they were at -0.03. Bank OZK's earnings per share for Q3 sits at $1.08, whereas in Q2, they were at 1.1. Its most recent dividend yield is at 3.34%, which has decreased by 0.07% from 3.41% in the previous quarter.
This quarter, Synchrony Finl experienced a decrease in earnings per share, which was $1.6 in Q2 and is now $1.47. Most recently, the company reported a dividend yield of 2.91%, which has increased by 0.15% from last quarter's yield of 2.76%.
This quarter, Summit Finl Gr experienced an increase in earnings per share, which was $0.92 in Q2 and is now $1.11. The company's most recent dividend yield sits at 2.82%, which has increased by 0.07% from 2.75% last quarter.
Most recently, United Security reported earnings per share at $0.26, whereas in Q2 earnings per share sat at $0.2. Most recently, the company reported a dividend yield of 6.22%, which has decreased by 0.44% from last quarter's yield of 6.66%.
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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