Market Overview

Overview Of Value Stocks In The Energy Sector


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 energy sector:

  1. Noble Midstream Partners (NASDAQ: NBLX) - P/E: 3.15
  2. Sprague Resources (NYSE: SRLP) - P/E: 9.16
  3. Black Stone Minerals (NYSE: BSM) - P/E: 4.93
  4. Earthstone Energy (NYSE: ESTE) - P/E: 2.76
  5. Enterprise Prods Partners (NYSE: EPD) - P/E: 8.75

Noble Midstream Partners saw an increase in earnings per share from 0.650 in Q4 to 1.330 now. The company’s most recent dividend yield sits at 13.54%, which has increased by 2.15% from 11.39% last quarter.

Sprague Resources saw an increase in earnings per share from 0.430 in Q4 to 1.950 now. Its most recent dividend yield is at 20.3%, which has increased by 4.55% from 15.75% in the previous quarter.

Black Stone Minerals’s earnings per share for Q1 sits at 0.340, whereas in Q4, they were at 0.170. The company’s most recent dividend yield sits at 5.67%, which has decreased by 6.37% from 12.04% last quarter.

Earthstone Energy has reported Q1 earnings per share at 0.130, which has decreased by 53.57% compared to Q4, which was 0.280. Earthstone Energy does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Enterprise Prods Partners’s earnings per share for Q1 sits at 0.530, whereas in Q4, they were at 0.540. Most recently, the company reported a dividend yield of 10.1%, which has decreased by 3.59% from last quarter’s yield of 13.69%.

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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