What are 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:
Spark Energy (NASDAQ:SPKE) - P/E: 9.61
Cia Paranaense De Energia (NYSE:ELP) - P/E: 5.5
Central Puerto (NYSE:CEPU) - P/E: 6.47
NRG Energy (NYSE:NRG) - P/E: 2.59
China Recycling Energy (NASDAQ:CREG) - P/E: 3.0
Spark Energy saw a decrease in earnings per share from 0.62 in Q2 to 0.52 now. Its most recent dividend yield is at 8.46%, which has decreased by 1.89% from 10.35% in the previous quarter.
Cia Paranaense De Energia has reported Q3 earnings per share at 0.46, which has decreased by 57.8% compared to Q2, which was 1.09. Most recently, the company reported a dividend yield of 8.62%, which has increased by 2.36% from last quarter's yield of 6.26%.
Central Puerto looks to be undervalued. It possesses an EPS of 0.02, which has not changed since last quarter (Q2). Central Puerto does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
This quarter, NRG Energy experienced a decrease in earnings per share, which was 1.27 in Q2 and is now 1.1. Its most recent dividend yield is at 3.62%, which has increased by 0.07% from 3.55% in the previous quarter.
Most recently, China Recycling Energy reported earnings per share at -0.25, whereas in Q2 earnings per share sat at 0.43. China Recycling Energy does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
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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