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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.
Below is a list of notable value stocks in the financial services sector:
Salisbury Bancorp (NASDAQ: SAL) - P/E: 8.97
Victory Capital Holdings (NASDAQ: VCTR) - P/E: 8.68
Elevate Credit (NYSE: ELVT) - P/E: 2.69
Rand Capital (NASDAQ: RAND) - P/E: 3.91
Flagstar Bancorp (NYSE: FBC) - P/E: 4.75
Salisbury Bancorp saw an increase in earnings per share from 0.96 in Q2 to 1.53 now. Its most recent dividend yield is at 3.36%, which has increased by 0.16% from 3.2% in the previous quarter.
Most recently, Victory Capital Holdings reported earnings per share at 1.0, whereas in Q2 earnings per share sat at 0.89. The company’s most recent dividend yield sits at 1.53%, which has increased by 0.21% from 1.32% last quarter.
Elevate Credit’s earnings per share for Q3 sits at 0.42, whereas in Q2, they were at 0.4. Elevate Credit does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Most recently, Rand Capital reported earnings per share at 0.11, whereas in Q2 earnings per share sat at 0.08. Rand Capital does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Flagstar Bancorp’s earnings per share for Q3 sits at 3.88, whereas in Q2, they were at 2.03. Its most recent dividend yield is at 0.61%, which has decreased by 0.08% from 0.69% 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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