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.
Benzinga Insights has compiled a list of value stocks in the utilities sector that may be worth watching:
- Kenon Hldgs (NYSE:KEN) - P/E: 1.43
- NRG Energy (NYSE:NRG) - P/E: 2.29
- Suburban Propane Partners (NYSE:SPH) - P/E: 6.24
- Genie Energy (NYSE:GNE) - P/E: 5.3
- Via Renewables (NASDAQ:VIA) - P/E: 6.33
Kenon Hldgs's earnings per share for Q1 sits at $11.86, whereas in Q4, they were at 7.28. NRG Energy's earnings per share for Q1 sits at $7.17, whereas in Q4, they were at -1.74. Most recently, the company reported a dividend yield of 3.53%, which has decreased by 0.1% from last quarter's yield of 3.63%.
Suburban Propane Partners saw an increase in earnings per share from 0.34 in Q1 to $2.74 now. Most recently, the company reported a dividend yield of 7.57%, which has decreased by 0.92% from last quarter's yield of 8.49%.
This quarter, Genie Energy experienced a decrease in earnings per share, which was $1.12 in Q4 and is now $0.67. The company's most recent dividend yield sits at 4.72%, which has decreased by 0.95% from 5.67% last quarter.
Via Renewables saw an increase in earnings per share from -0.96 in Q4 to $0.7 now. The company's most recent dividend yield sits at 9.15%, which has increased by 2.88% from 6.27% last 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.
