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 utilities sector:
- Vidler Water Resources (NASDAQ:VWTR) - P/E: 9.01
- Suburban Propane Partners (NYSE:SPH) - P/E: 9.97
- UGI (NYSE:UGI) - P/E: 7.17
- Brookfield Renewable (NYSE:BEPC) - P/E: 7.25
- Energy Co of Minas Gerais (NYSE:CIG) - P/E: 6.82
Vidler Water Resources saw an increase in earnings per share from -0.06 in Q3 to $1.85 now. 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%.
UGI's earnings per share for Q1 sits at $0.93, whereas in Q4, they were 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%.
Most recently, Brookfield Renewable reported earnings per share at $-0.12, whereas in Q3 earnings per share sat at $-0.21. Its most recent dividend yield is at 3.8%, which has increased by 0.9% from 2.9% in the previous quarter.
Most recently, Energy Co of Minas Gerais reported earnings per share at $0.05, whereas in Q2 earnings per share sat at $0.22. Its most recent dividend yield is at 0.84%, which has decreased by 5.63% from 6.47% 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.
