Understanding Value Stocks
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:
- Vermilion Energy (NYSE:VET) - P/E: 4.26
- Dorian LPG (NYSE:LPG) - P/E: 5.58
- Sunoco (NYSE:SUN) - P/E: 8.61
- Star Group (NYSE:SGU) - P/E: 5.69
- Dynagas LNG Partners (NYSE:DLNG) - P/E: 2.93
Most recently, Vermilion Energy reported earnings per share at -0.72, whereas in Q2 earnings per share sat at 2.27. The company's most recent dividend yield sits at 28.87%, which has increased by 14.13% from 14.74% last quarter.
Dorian LPG's earnings per share for Q2 sits at 0.25, whereas in Q1, they were at 0.13. Most recently, the company reported a dividend yield of 30.6%, which has decreased by 2.11% from last quarter's yield of 32.71%.
Sunoco saw a decrease in earnings per share from 1.73 in Q2 to 1.0 now. Its most recent dividend yield is at 7.69%, which has decreased by 0.22% from 7.91% in the previous quarter.
Most recently, Star Group reported earnings per share at -0.58, whereas in Q3 earnings per share sat at -0.3. Most recently, the company reported a dividend yield of 5.42%, which has increased by 0.07% from last quarter's yield of 5.35%.
Dynagas LNG Partners saw an increase in earnings per share from 0.2 in Q2 to 0.24 now. Its most recent dividend yield is at 11.0%, which has increased by 4.95% from 6.05% 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.
