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.

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

1. CrossAmerica Partners CAPL - P/E: 6.27
2. BP Midstream Partners BPMP - P/E: 6.47
3. Smart Sand SND - P/E: 1.84
4. Euronav EURN - P/E: 2.59
5. Dynagas LNG Partners DLNG - P/E: 5.16

CrossAmerica Partners’s earnings per share for Q3 sits at 0.56, whereas in Q2, they were at 0.14. Its most recent dividend yield is at 13.77%, which has decreased by 1.89% from 15.66% in the previous quarter.

BP Midstream Partners saw an increase in earnings per share from 0.38 in Q2 to 0.42 now. Most recently, the company reported a dividend yield of 13.78%, which has increased by 0.52% from last quarter’s yield of 13.26%.

This quarter, Smart Sand experienced a decrease in earnings per share, which was 0.12 in Q2 and is now -0.09. Smart Sand does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Euronav’s earnings per share for Q3 sits at 0.22, whereas in Q2, they were at 1.21. Most recently, the company reported a dividend yield of 4.86%, which has decreased by 14.17% from last quarter’s yield of 19.03%.

Dynagas LNG Partners’s earnings per share for Q3 sits at 0.21, whereas in Q2, they were at 0.2. Its most recent dividend yield is at 11.0%, which has increased by 4.95% from 6.05% in the previous 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.