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 financial services sector:
- First BanCorp (NYSE:FBP) – P/E: 8.68
- Citizens Financial Group (NYSE:CFG) – P/E: 6.06
- Banco De Chile (NYSE:BCH) – P/E: 7.29
- Ohio Valley Banc (NASDAQ:OVBC) – P/E: 8.31
- State Street (NYSE:STT) – P/E: 9.14
First BanCorp has reported Q2 earnings per share at $0.37, which has decreased by 5.13% compared to Q1, which was 0.39. Its most recent dividend yield is at 4.02%, which has decreased by 0.81% from 4.83% in the previous quarter.
Citizens Financial Group’s earnings per share for Q2 sits at $1.04, whereas in Q1, they were at 1.1. The company’s most recent dividend yield sits at 5.77%, which has increased by 0.25% from 5.52% last quarter.
Banco De Chile saw a decrease in earnings per share from 0.81 in Q4 to $0.66 now. The company’s most recent dividend yield sits at 9.89%, which has increased by 3.32% from 6.57% last quarter.
Most recently, Ohio Valley Banc reported earnings per share at $0.68, whereas in Q1 earnings per share sat at $0.82. Most recently, State Street reported earnings per share at $2.17, whereas in Q1 earnings per share sat at $1.52. Its most recent dividend yield is at 3.98%, which has increased by 0.2% from 3.78% 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.
