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 labelled as a value stock.
The following stocks are considered to be notable value stocks in the utilities sector:
- Energy Co of Minas Gerais (NYSE:CIG) - P/E: 5.69
- Brookfield Renewable (NYSE:BEPC) - P/E: 7.39
- UGI (NYSE:UGI) - P/E: 6.82
- Kenon Hldgs (NYSE:KEN) - P/E: 4.44
- Suburban Propane Partners (NYSE:SPH) - P/E: 8.92
This quarter, Energy Co of Minas Gerais experienced a decrease in earnings per share, which was $0.22 in Q2 and is now $0.05. Most recently, Brookfield Renewable reported earnings per share at $-0.12, whereas in Q3 earnings per share sat at $-0.21. Most recently, the company reported a dividend yield of 3.8%, which has increased by 0.9% from last quarter's yield of 2.9%.
Most recently, UGI reported earnings per share at $0.93, whereas in Q4 earnings per share sat at $-0.34. Most recently, the company reported a dividend yield of 3.01%, which has decreased by 0.04% from last quarter's yield of 3.05%.
Kenon Hldgs's earnings per share for Q3 sits at $3.45, whereas in Q2, they were at 3.2. Suburban Propane Partners has reported Q1 earnings per share at $0.34, which has increased by 278.95% compared to Q4, which was -0.19. Most recently, the company reported a dividend yield of 8.49%, which has increased by 0.35% from last quarter's yield of 8.14%.
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.
