What Defines 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.
Below is a list of notable value stocks in the utilities sector:
- Kenon Hldgs (NYSE:KEN) - P/E: 3.28
- Smart Powerr (NASDAQ:CREG) - P/E: 1.89
- NRG Energy (NYSE:NRG) - P/E: 2.79
- Genie Energy (NYSE:GNE) - P/E: 4.49
- Suburban Propane Partners (NYSE:SPH) - P/E: 6.93
Kenon Hldgs has reported Q4 earnings per share at $7.28, which has increased by 111.01% compared to Q3, which was 3.45. Smart Powerr saw an increase in earnings per share from -0.16 in Q2 to $-0.08 now. Most recently, NRG Energy reported earnings per share at $7.17, whereas in Q4 earnings per share sat at $-1.74. Its most recent dividend yield is at 3.53%, which has decreased by 0.1% from 3.63% in the previous quarter.
Genie Energy's earnings per share for Q1 sits at $0.67, whereas in Q4, they were at 1.12. Its most recent dividend yield is at 4.72%, which has decreased by 0.95% from 5.67% in the previous quarter.
Suburban Propane Partners has reported Q2 earnings per share at $2.74, which has increased by 705.88% compared to Q1, which was 0.34. 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%.
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.
