What is a Value Stock?
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:
- Crescent Point Energy (NYSE:CPG) - P/E: 2.22
- Adams Resources & Energy (AMEX:AE) - P/E: 8.99
- Energy Transfer (NYSE:ET) - P/E: 5.66
- China Petroleum (NYSE:SNP) - P/E: 4.22
- PBF Logistics (NYSE:PBFX) - P/E: 5.97
Crescent Point Energy's earnings per share for Q3 sits at $0.19, whereas in Q2, they were at 0.16. Most recently, the company reported a dividend yield of 3.16%, which has increased by 0.4% from last quarter's yield of 2.76%.
This quarter, Adams Resources & Energy experienced a decrease in earnings per share, which was $0.44 in Q2 and is now $0.41. The company's most recent dividend yield sits at 2.92%, which has decreased by 0.64% from 3.56% last quarter.
Most recently, Energy Transfer reported earnings per share at $0.29, whereas in Q3 earnings per share sat at $0.2. Most recently, the company reported a dividend yield of 7.63%, which has increased by 1.52% from last quarter's yield of 6.11%.
This quarter, China Petroleum experienced an increase in earnings per share, which was $2.63 in Q2 and is now $2.64. Most recently, the company reported a dividend yield of 10.47%, which has increased by 3.82% from last quarter's yield of 6.65%.
PBF Logistics's earnings per share for Q4 sits at $0.64, whereas in Q3, they were at 0.58. Its most recent dividend yield is at 8.73%, which has decreased by 0.02% from 8.75% 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.
