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 labelled as a value stock.
Benzinga Insights has compiled a list of value stocks in the basic materials sector that may be worth watching:
- Cementos Pacasmayo (NYSE:CPAC) - P/E: 9.31
- Origin Mat (NASDAQ:ORGN) - P/E: 7.47
- Valhi (NYSE:VHI) - P/E: 7.54
- Boise Cascade (NYSE:BCC) - P/E: 2.55
- Westlake (NYSE:WLK) - P/E: 4.85
Cementos Pacasmayo saw an increase in earnings per share from 0.09 in Q4 to $0.15 now. Its most recent dividend yield is at 13.13%, which has increased by 9.05% from 4.08% in the previous quarter.
This quarter, Origin Mat experienced an increase in earnings per share, which was $0.04 in Q4 and is now $0.05. Valhi has reported Q1 earnings per share at $1.59, which has decreased by 13.11% compared to Q4, which was 1.83. The company's most recent dividend yield sits at 0.69%, which has decreased by 0.58% from 1.27% last quarter.
Boise Cascade's earnings per share for Q1 sits at $7.61, whereas in Q4, they were at 4.26. Its most recent dividend yield is at 11.76%, which has increased by 11.2% from 0.56% in the previous quarter.
Westlake's earnings per share for Q1 sits at $5.83, whereas in Q4, they were at 4.98. Most recently, the company reported a dividend yield of 0.94%, which has decreased by 0.14% from last quarter's yield of 1.08%.
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.
