What Defines 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.
Benzinga Insights has compiled a list of value stocks in the financial services sector that may be worth watching:
- Encore Capital Gr (NASDAQ:ECPG) – P/E: 4.74
- Sixth Street Specialty (NYSE:TSLX) – P/E: 5.34
- Enova International (NYSE:ENVA) – P/E: 2.79
- Popular (NASDAQ:BPOP) – P/E: 9.36
- ACNB (NASDAQ:ACNB) – P/E: 9.26
Encore Capital Gr saw an increase in earnings per share from 1.3 in Q4 to 2.97 now. Encore Capital Gr does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Sixth Street Specialty saw an increase in earnings per share from 0.5 in Q4 to 0.53 now. Sixth Street Specialty does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Enova International saw a decrease in earnings per share from 2.39 in Q4 to 2.2 now. Enova International does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Most recently, Popular reported earnings per share at 3.12, whereas in Q4 earnings per share sat at 2.1. Its most recent dividend yield is at 2.32%, which has decreased by 0.05% from 2.37% in the previous quarter.
ACNB’s earnings per share for Q1 sits at 0.86, whereas in Q4, they were at 0.81. The company’s most recent dividend yield sits at 3.56%, which has decreased by 0.43% from 3.99% 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.