The Meaning Behind Value Stocks
A value stock is traditionally defined in terms of how investors in the marketplace are valuing that company’s future growth prospects. Low P/E multiples are good base indicators that the company is undervalued and can most likely be labelled as a value stock.
Benzinga Insights has compiled a list of value stocks in the consumer cyclical sector that may be worth watching:
- Macy’s (NYSE:M) – P/E: 3.42
- Bluegreen Vacations (NYSE:BVH) – P/E: 9.49
- Lennar (NYSE:LEN) – P/E: 6.68
- Buckle (NYSE:BKE) – P/E: 6.2
- Dillard’s (NYSE:DDS) – P/E: 5.87
This quarter, Macy’s experienced an increase in earnings per share, which was $0.52 in Q3 and is now $1.88. Most recently, the company reported a dividend yield of 3.19%, which has increased by 0.18% from last quarter’s yield of 3.01%.
Bluegreen Vacations saw an increase in earnings per share from 0.61 in Q4 to $0.71 now. Its most recent dividend yield is at 2.47%, which has decreased by 1.2% from 3.67% in the previous quarter.
This quarter, Lennar experienced a decrease in earnings per share, which was $5.02 in Q4 and is now $2.12. The company’s most recent dividend yield sits at 1.42%, which has decreased by 0.1% from 1.52% last quarter.
Buckle has reported Q1 earnings per share at $0.86, which has decreased by 51.14% compared to Q4, which was 1.76. Dillard’s has reported Q1 earnings per share at $11.85, which has decreased by 29.84% compared to Q4, which was 16.89. The company’s most recent dividend yield sits at 0.29%, which has increased by 0.06% from 0.23% 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.
