Understanding Value Stocks
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 communication services sector that may be worth watching:
- AT&T (NYSE:T) - P/E: 8.3
- Lumen Technologies (NYSE:LUMN) - P/E: 5.63
- Salem Media Group (NASDAQ:SALM) - P/E: 1.72
- DISH Network (NASDAQ:DISH) - P/E: 5.99
- Tegna (NYSE:TGNA) - P/E: 9.4
AT&T has reported Q1 earnings per share at $0.77, which has decreased by 1.28% compared to Q4, which was 0.78. The company's most recent dividend yield sits at 4.77%, which has decreased by 4.61% from 9.38% last quarter.
This quarter, Lumen Technologies experienced an increase in earnings per share, which was $0.51 in Q4 and is now $0.63. Most recently, the company reported a dividend yield of 10.4%, which has increased by 3.13% from last quarter's yield of 7.27%.
Salem Media Group saw a decrease in earnings per share from 0.61 in Q4 to $0.06 now. Its most recent dividend yield is at 8.77%, which has increased by 1.87% from 6.9% in the previous quarter.
DISH Network's earnings per share for Q1 sits at $0.68, whereas in Q4, they were at 0.87. This quarter, Tegna experienced an increase in earnings per share, which was $0.57 in Q4 and is now $0.59. Most recently, the company reported a dividend yield of 1.7%, which has decreased by 0.11% from last quarter's yield of 1.81%.
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.
