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.

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

1. NRG Energy NRG - P/E: 2.03
2. Cia Paranaense De Energia ELP - P/E: 5.52
3. Central Puerto CEPU - P/E: 3.17
4. Enel Americas ENIA - P/E: 6.67
5. Pampa Energia PAM - P/E: 0.04

This quarter, NRG Energy experienced an increase in earnings per share, which was 0.49 in Q1 and is now 1.27. Most recently, the company reported a dividend yield of 3.55%, which has decreased by 0.4% from last quarter’s yield of 3.95%.

Most recently, Cia Paranaense De Energia reported earnings per share at 1.09, whereas in Q1 earnings per share sat at 0.42. The company’s most recent dividend yield sits at 6.26%, which has increased by 4.11% from 2.15% last quarter.

Central Puerto’s earnings per share for Q2 sits at 0.02, whereas in Q1, they were at 0.01. Central Puerto does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Enel Americas saw a decrease in earnings per share from 0.0 in Q1 to 0.0 now. Its most recent dividend yield is at 11.07%, which has increased by 9.39% from 1.68% in the previous quarter.

Pampa Energia saw a decrease in earnings per share from 0.21 in Q1 to 0.06 now. 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.