Understanding 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 labelled as a value stock.
The following stocks are considered to be notable value stocks in the utilities sector:
- Spark Energy (NASDAQ:SPKE) – P/E: 7.22
- Cia Paranaense De Energia (NYSE:ELP) – P/E: 4.57
- Atlantic Power (NYSE:AT) – P/E: 4.74
- Pampa Energia (NYSE:PAM) – P/E: 0.2
- China Recycling Energy (NASDAQ:CREG) – P/E: 4.01
Spark Energy has reported Q4 earnings per share at 0.13, which has decreased by 75.0% compared to Q3, which was 0.52. The company’s most recent dividend yield sits at 6.57%, which has decreased by 1.89% from 8.46% last quarter.
Cia Paranaense De Energia’s earnings per share for Q4 sits at 0.72, whereas in Q3, they were at 0.46. Its most recent dividend yield is at 8.62%, which has increased by 2.36% from 6.26% in the previous quarter.
Atlantic Power saw an increase in earnings per share from 0.15 in Q3 to 0.3 now. Its most recent dividend yield is at 11.16%, which has increased by 5.83% from 5.33% in the previous quarter.
Most recently, Pampa Energia reported earnings per share at 0.41, whereas in Q3 earnings per share sat at 0.05. Pampa Energia does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
China Recycling Energy saw a decrease in earnings per share from 0.43 in Q2 to -0.25 now. 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.
