What is a Value Stock?
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.
Below is a list of notable value stocks in the energy sector:
- Seadrill (NYSE:SDRL) – P/E: 0.76
- US Silica Holdings (NYSE:SLCA) – P/E: 7.17
- Northern Oil & Gas (NYSE:NOG) – P/E: 2.81
- Vermilion Energy (NYSE:VET) – P/E: 2.37
- NOW (NYSE:DNOW) – P/E: 9.93
Seadrill has reported Q2 earnings per share at $1.16, which has increased by 39.76% compared to Q1, which was 0.83. Its most recent dividend yield is at 11.1%, which has increased by 2.32% from 8.78% in the previous quarter.
Most recently, US Silica Holdings reported earnings per share at $0.6, whereas in Q1 earnings per share sat at $0.64. Its most recent dividend yield is at 1.33%, which has decreased by 3.15% from 4.48% in the previous quarter.
Northern Oil & Gas has reported Q2 earnings per share at $1.49, which has decreased by 15.34% compared to Q1, which was 1.76. Most recently, the company reported a dividend yield of 3.86%, which has decreased by 0.6% from last quarter’s yield of 4.46%.
Vermilion Energy’s earnings per share for Q2 sits at $0.58, whereas in Q1, they were at 1.73. The company’s most recent dividend yield sits at 2.2%, which has increased by 0.09% from 2.11% last quarter.
NOW has been featured as a value stock. NOW’s Q2 EPS sits at $0.25, which has not changed since last quarter (Q1).
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.
