Understanding 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.
The following stocks are considered to be notable value stocks in the industrials sector:
- Safe Bulkers (NYSE:SB) - P/E: 2.53
- Seanergy Maritime Hldgs (NASDAQ:SHIP) - P/E: 2.98
- SFL Corp (NYSE:SFL) - P/E: 6.84
- Owens-Corning (NYSE:OC) - P/E: 7.2
- Veritiv (NYSE:VRTV) - P/E: 8.52
Safe Bulkers's earnings per share for Q1 sits at $0.24, whereas in Q4, they were at 0.39. Most recently, the company reported a dividend yield of 4.26%, which has decreased by 0.45% from last quarter's yield of 4.71%.
This quarter, Seanergy Maritime Hldgs experienced a decrease in earnings per share, which was $0.14 in Q4 and is now $0.04. Most recently, the company reported a dividend yield of 8.33%, which has increased by 0.46% from last quarter's yield of 7.87%.
This quarter, SFL Corp experienced an increase in earnings per share, which was $0.32 in Q4 and is now $0.37. Most recently, the company reported a dividend yield of 8.69%, which has decreased by 0.47% from last quarter's yield of 9.16%.
Owens-Corning saw an increase in earnings per share from 2.2 in Q4 to $2.84 now. Most recently, the company reported a dividend yield of 1.68%, which has increased by 0.15% from last quarter's yield of 1.53%.
Veritiv saw an increase in earnings per share from 3.67 in Q4 to $5.12 now.
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.
