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 financial services sector:
- Crescent Capital BDC (NASDAQ:CCAP) - P/E: 7.19
- Mid Penn Bancorp (NASDAQ:MPB) - P/E: 8.93
- Orrstown Finl Servs (NASDAQ:ORRF) - P/E: 7.74
- Orange County Bancorp (NASDAQ:OBT) - P/E: 8.79
- United Security (NASDAQ:UBFO) - P/E: 6.45
Crescent Capital BDC has reported Q4 earnings per share at $0.61, which has increased by 3.39% compared to Q3, which was 0.59. Most recently, Mid Penn Bancorp reported earnings per share at $0.73, whereas in Q3 earnings per share sat at $0.57. The company's most recent dividend yield sits at 3.35%, which has decreased by 0.86% from 4.21% last quarter.
Most recently, Orrstown Finl Servs reported earnings per share at $0.83, whereas in Q3 earnings per share sat at $0.87. Its most recent dividend yield is at 2.8%, which has decreased by 1.15% from 3.95% in the previous quarter.
Orange County Bancorp saw a decrease in earnings per share from 1.61 in Q3 to $1.44 now. The company's most recent dividend yield sits at 1.92%, which has decreased by 0.06% from 1.98% last quarter.
United Security's earnings per share for Q4 sits at $0.31, whereas in Q3, they were at 0.23. Most recently, the company reported a dividend yield of 5.59%, which has decreased by 1.07% from last quarter's yield of 6.66%.
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.