What Defines 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 utilities sector:
- Altus Power (NYSE:AMPS) - P/E: 8.8
- Pampa Energia (NYSE:PAM) - P/E: 5.73
- TransAlta (NYSE:TAC) - P/E: 5.14
- Hawaiian Electric Indus (NYSE:HE) - P/E: 6.58
- Enel Chile (NYSE:ENIC) - P/E: 2.84
Most recently, Altus Power reported earnings per share at $0.03, whereas in Q2 earnings per share sat at $0.04. Pampa Energia has reported Q3 earnings per share at $2.8, which has decreased by 6.98% compared to Q2, which was 3.01. TransAlta saw an increase in earnings per share from 0.17 in Q2 to $1.05 now. Most recently, the company reported a dividend yield of 2.08%, which has decreased by 0.08% from last quarter's yield of 2.16%.
Hawaiian Electric Indus has reported Q3 earnings per share at $0.56, which has increased by 12.0% compared to Q2, which was 0.5. Most recently, the company reported a dividend yield of 3.75%, which has increased by 0.01% from last quarter's yield of 3.74%.
Most recently, Enel Chile reported earnings per share at $0.14, whereas in Q2 earnings per share sat at $0.1. The company's most recent dividend yield sits at 64.82%, which has decreased by 1.55% from 66.37% 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.