5 Value Stocks To Watch In The Basic Materials Sector

Understanding 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.

The following stocks are considered to be notable value stocks in the basic materials sector:

1. Centerra Gold CGAU - P/E: 4.2
2. Valhi VHI - P/E: 7.98
3. Cleveland-Cliffs CLF - P/E: 5.54
4. LyondellBasell Industries LYB - P/E: 5.32
5. West Fraser Timber WFG - P/E: 3.1

Centerra Gold has reported Q3 earnings per share at 0.12, which has decreased by 53.85% compared to Q2, which was 0.26. Centerra Gold does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Valhi saw an increase in earnings per share from 0.75 in Q2 to 1.36 now. Most recently, the company reported a dividend yield of 1.38%, which has decreased by 0.13% from last quarter's yield of 1.51%.

Cleveland-Cliffs saw an increase in earnings per share from 1.46 in Q2 to 2.33 now. The company's most recent dividend yield sits at 3.25%, which has increased by 0.33% from 2.92% last quarter.

This quarter, LyondellBasell Industries experienced a decrease in earnings per share, which was 6.13 in Q2 and is now 5.25. Its most recent dividend yield is at 4.95%, which has increased by 0.3% from 4.65% in the previous quarter.

This quarter, West Fraser Timber experienced a decrease in earnings per share, which was 12.32 in Q2 and is now 4.2. West Fraser Timber does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

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.