What are 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.
Below is a list of notable value stocks in the consumer cyclical sector:
- Tri Pointe Homes (NYSE:TPH) – P/E: 4.63
- Ethan Allen Interiors (NYSE:ETD) – P/E: 6.09
- O-I Glass (NYSE:OI) – P/E: 6.25
- Destination XL Group (NASDAQ:DXLG) – P/E: 4.28
- WestRock (NYSE:WRK) – P/E: 9.81
Tri Pointe Homes saw an increase in earnings per share from 1.45 in Q3 to $1.98 now. Most recently, the company reported a dividend yield of 0.78%, which has increased by 0.09% from last quarter’s yield of 0.69%.
Ethan Allen Interiors’s earnings per share for Q2 sits at $1.1, whereas in Q1, they were at 1.11. The company’s most recent dividend yield sits at 4.52%, which has increased by 0.04% from 4.48% last quarter.
This quarter, O-I Glass experienced a decrease in earnings per share, which was $0.63 in Q3 and is now $0.38. Most recently, the company reported a dividend yield of 1.54%, which has decreased by 0.33% from last quarter’s yield of 1.87%.
Most recently, Destination XL Group reported earnings per share at $0.13, whereas in Q3 earnings per share sat at $0.16. WestRock’s earnings per share for Q1 sits at $0.55, whereas in Q4, they were at 1.43. The company’s most recent dividend yield sits at 2.89%, which has decreased by 0.41% from 3.3% 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.
