What is 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 energy sector:

1. Hoegh LNG Partners HMLP - P/E: 8.49
2. TC Pipelines TCP - P/E: 7.24
3. Black Stone Minerals BSM - P/E: 8.2
4. Delek Logistics Partners DKL - P/E: 8.51
5. Phillips 66 Partners PSXP - P/E: 5.55

Most recently, Hoegh LNG Partners reported earnings per share at 0.5, whereas in Q1 earnings per share sat at 0.07. Its most recent dividend yield is at 17.09%, which has increased by 0.76% from 16.33% in the previous quarter.

TC Pipelines’s earnings per share for Q2 sits at 0.78, whereas in Q1, they were at 1.21. Its most recent dividend yield is at 8.15%, which has increased by 0.54% from 7.61% in the previous quarter.

Black Stone Minerals’s earnings per share for Q2 sits at -0.07, whereas in Q1, they were at 0.34. Its most recent dividend yield is at 9.45%, which has increased by 3.78% from 5.67% in the previous quarter.

Delek Logistics Partners saw an increase in earnings per share from 0.76 in Q1 to 1.18 now. Most recently, the company reported a dividend yield of 14.0%, which has decreased by 24.7% from last quarter’s yield of 38.7%.

This quarter, Phillips 66 Partners experienced an increase in earnings per share, which was 0.93 in Q1 and is now 1.05. Most recently, the company reported a dividend yield of 11.66%, which has increased by 3.07% from last quarter’s yield of 8.59%.

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.