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.

Benzinga Insights has compiled a list of value stocks in the utilities sector that may be worth watching:

1. Spark Energy SPKE - P/E: 5.27
2. Kenon Hldgs KEN - P/E: 4.47
3. Enel Americas ENIA - P/E: 6.77
4. Cia Paranaense De Energia ELP - P/E: 5.38
5. Pampa Energia PAM - P/E: 0.04

This quarter, Spark Energy experienced an increase in earnings per share, which was 0.2 in Q1 and is now 0.62. Most recently, the company reported a dividend yield of 10.35%, which has increased by 0.18% from last quarter’s yield of 10.17%.

Most recently, Kenon Hldgs reported earnings per share at 0.02, whereas in Q1 earnings per share sat at 0.28. Kenon Hldgs does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Enel Americas’s earnings per share for Q2 sits at 0.0, whereas in Q1, they were at 0.0. The company’s most recent dividend yield sits at 11.07%, which has increased by 9.39% from 1.68% last quarter.

Cia Paranaense De Energia has reported Q2 earnings per share at 1.09, which has increased by 159.52% compared to Q1, which was 0.42. Most recently, the company reported a dividend yield of 6.26%, which has increased by 4.11% from last quarter’s yield of 2.15%.

Most recently, Pampa Energia reported earnings per share at 0.06, whereas in Q1 earnings per share sat at 0.21. Pampa Energia does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

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.