What are 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 utilities sector:
- Genie Energy (NYSE:GNE) - P/E: 7.43
- Pampa Energia (NYSE:PAM) - P/E: 4.04
- UGI (NYSE:UGI) - P/E: 6.98
- Smart Powerr (NASDAQ:CREG) - P/E: 3.36
- Energy Co of Minas Gerais (NYSE:CIG) - P/E: 6.59
This quarter, Genie Energy experienced an increase in earnings per share, which was $0.16 in Q3 and is now $1.12. Its most recent dividend yield is at 5.67%, which has increased by 1.77% from 3.9% in the previous quarter.
This quarter, Pampa Energia experienced a decrease in earnings per share, which was $2.36 in Q3 and is now $0.7. This quarter, UGI experienced an increase in earnings per share, which was $-0.34 in Q4 and is now $0.93. Its most recent dividend yield is at 3.01%, which has decreased by 0.04% from 3.05% in the previous quarter.
This quarter, Smart Powerr experienced an increase in earnings per share, which was $-0.16 in Q2 and is now $-0.08. 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.
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.
