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The Meaning Behind 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 labeled as a value stock.
Below is a list of notable value stocks in the utilities sector:
Cia Paranaense De Energia (NYSE: ELP) - P/E: 5.68
NRG Energy (NYSE: NRG) - P/E: 2.12
Spark Energy (NASDAQ: SPKE) - P/E: 5.94
Pampa Energia (NYSE: PAM) - P/E: 0.04
Enel Americas (NYSE: ENIA) - P/E: 7.63
Most recently, Cia Paranaense De Energia reported earnings per share at 1.09, whereas in Q1 earnings per share sat at 0.42. Most recently, the company reported a dividend yield of 6.26%, which has increased by 4.11% from last quarter’s yield of 2.15%.
NRG Energy’s earnings per share for Q2 sits at 1.27, whereas in Q1, they were at 0.49. Its most recent dividend yield is at 3.55%, which has decreased by 0.4% from 3.95% in the previous quarter.
This quarter, Spark Energy experienced an increase in earnings per share, which was 0.2 in Q1 and is now 0.62. Most recently, the company reported a dividend yield of 10.35%, which has increased by 0.18% from last quarter’s yield of 10.17%.
Most recently, Pampa Energia reported earnings per share at 0.06, whereas in Q1 earnings per share sat at 0.21. Pampa Energia does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Most recently, Enel Americas reported earnings per share at 0.0, whereas in Q1 earnings per share sat at 0.0. Its most recent dividend yield is at 11.07%, which has increased by 9.39% from 1.68% 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.
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