What Defines a Value Stock?

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 labeled as a value stock.

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

1. Tegna TGNA - P/E: 9.74
2. Jiayin Gr JFIN - P/E: 5.74
3. Telephone and Data TDS - P/E: 9.99
4. Nexstar Media Group NXST - P/E: 8.42
5. GCI Liberty GLIBA - P/E: 6.16

Tegna saw an increase in earnings per share from 0.12 in Q2 to 0.59 now. Most recently, the company reported a dividend yield of 2.25%, which has decreased by 0.15% from last quarter’s yield of 2.4%.

Jiayin Gr looks to be undervalued. It possesses an EPS of 0.03, which has not changed since last quarter (Q1). Jiayin Gr does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Telephone and Data’s earnings per share for Q3 sits at 0.66, whereas in Q2, they were at 0.56. The company’s most recent dividend yield sits at 2.94%, which has decreased by 0.61% from 3.55% last quarter.

Nexstar Media Group has reported Q3 earnings per share at 4.08, which has increased by 101.98% compared to Q2, which was 2.02. The company’s most recent dividend yield sits at 2.56%, which has decreased by 0.08% from 2.64% last quarter.

GCI Liberty’s earnings per share for Q3 sits at 7.74, whereas in Q2, they were at 5.76. GCI Liberty 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.