The Meaning Behind 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.

Below is a list of notable value stocks in the energy sector:

This quarter, Kosmos Energy experienced a decrease in earnings per share, which was $0.28 in Q2 and is now $0.19. Most recently, the company reported a dividend yield of 3.64%, which has increased by 0.77% from last quarter's yield of 2.87%.

Vermilion Energy has reported Q3 earnings per share at $1.23, which has decreased by 28.49% compared to Q2, which was 1.72. Most recently, the company reported a dividend yield of 1.46%, which has increased by 0.18% from last quarter's yield of 1.28%.

Matador Resources has reported Q3 earnings per share at $2.68, which has decreased by 22.77% compared to Q2, which was 3.47. The company's most recent dividend yield sits at 0.59%, which has decreased by 0.25% from 0.84% last quarter.

This quarter, Dynagas LNG Partners experienced a decrease in earnings per share, which was $0.17 in Q2 and is now $0.04. The company's most recent dividend yield sits at 11.0%, which has increased by 4.95% from 6.05% last quarter.

Plains All American looks to be undervalued. It possesses an EPS of $0.33, which has not changed since last quarter (Q3). The company's most recent dividend yield sits at 8.99%, which has increased by 1.17% from 7.82% 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.