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 consumer defensive sector:
- China Online Education Gr (NYSE:COE) - P/E: 3.47
- Albertsons Companies (NYSE:ACI) - P/E: 10.0
- Sunlands Technology (NYSE:STG) - P/E: 0.72
- Herbalife Nutrition (NYSE:HLF) - P/E: 7.04
- Newell Brands (NASDAQ:NWL) - P/E: 9.78
Most recently, China Online Education Gr reported earnings per share at $-0.67, whereas in Q1 earnings per share sat at $-0.94. Albertsons Companies's earnings per share for Q1 sits at $1.0, whereas in Q4, they were at 0.75. Most recently, the company reported a dividend yield of 1.81%, which has increased by 0.43% from last quarter's yield of 1.38%.
Sunlands Technology's earnings per share for Q2 sits at $1.26, whereas in Q1, they were at 2.14. This quarter, Herbalife Nutrition experienced a decrease in earnings per share, which was $0.99 in Q1 and is now $0.96. Its most recent dividend yield is at 1.71%, which has decreased by 1.82% from 3.53% in the previous quarter.
This quarter, Newell Brands experienced an increase in earnings per share, which was $0.36 in Q1 and is now $0.57. The company's most recent dividend yield sits at 4.63%, which has increased by 0.68% from 3.95% last 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.