What is a Value Stock?
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 energy sector:
- KLX Energy Services Hldgs (NASDAQ:KLXE) - P/E: 3.14
- Eni (NYSE:E) - P/E: 9.61
- Vitesse Energy (NYSE:VTS) - P/E: 7.83
- Profire Energy (NASDAQ:PFIE) - P/E: 9.84
- Teekay Tankers (NYSE:TNK) - P/E: 3.2
KLX Energy Services Hldgs has reported Q3 earnings per share at $0.51, which has decreased by 37.04% compared to Q2, which was 0.81. Eni has reported Q3 earnings per share at $1.18, which has decreased by 4.84% compared to Q2, which was 1.24. The company's most recent dividend yield sits at 3.31%, which has decreased by 0.15% from 3.46% last quarter.
Vitesse Energy saw an increase in earnings per share from 0.35 in Q2 to $0.38 now. The company's most recent dividend yield sits at 8.44%, which has increased by 0.27% from 8.17% last quarter.
Profire Energy saw a decrease in earnings per share from 0.06 in Q2 to $0.04 now. Most recently, Teekay Tankers reported earnings per share at $2.24, whereas in Q2 earnings per share sat at $4.38. The company's most recent dividend yield sits at 1.95%, which has decreased by 0.36% from 2.31% 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.