What Defines a Value Stock?
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.
Benzinga Insights has compiled a list of value stocks in the energy sector that may be worth watching:
- Ranger Energy Services (NYSE:RNGR) - P/E: 4.44
- Marathon Petroleum (NYSE:MPC) - P/E: 4.39
- RPC (NYSE:RES) - P/E: 9.61
- Ovintiv (NYSE:OVV) - P/E: 3.38
- Golar LNG (NASDAQ:GLNG) - P/E: 3.15
This quarter, Ranger Energy Services experienced an increase in earnings per share, which was $-0.02 in Q2 and is now $0.54. Most recently, Marathon Petroleum reported earnings per share at $6.65, whereas in Q3 earnings per share sat at $7.81. Its most recent dividend yield is at 2.22%, which has decreased by 0.42% from 2.64% in the previous quarter.
RPC's earnings per share for Q4 sits at $0.41, whereas in Q3, they were at 0.32. Its most recent dividend yield is at 1.86%, which has increased by 0.99% from 0.87% in the previous quarter.
This quarter, Ovintiv experienced a decrease in earnings per share, which was $2.41 in Q2 and is now $1.44. The company's most recent dividend yield sits at 1.8%, which has decreased by 0.26% from 2.06% last quarter.
Golar LNG's earnings per share for Q3 sits at $1.31, whereas in Q2, they were at 2.13. Its most recent dividend yield is at 3.0%, which has ('', 'not changed') by 0.0% from 3.0% 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.