A Look Into Energy Sector Value Stocks

What is a Value Stock?

A value stock traditionally has a lower price when compared to stock prices of companies in the same industry. This indicates that the company may be undervalued, as investors are not expressing as much interest in such companies. The most commonly used way to check for value is with the price-to-earnings multiple, or P/E. A low P/E multiple is a good indication that the stock is undervalued.

Below is a list of notable value stocks in the energy sector:

1. Flex LNG FLNG - P/E: 8.16
2. Cenovus Energy CVE - P/E: 9.75
3. Marathon Petroleum MPC - P/E: 5.14
4. Barnwell Industries BRN - P/E: 3.93
5. NACCO Industries NC - P/E: 3.86

Flex LNG's earnings per share for Q3 sits at $0.79, whereas in Q2, they were at 0.61. Most recently, the company reported a dividend yield of 8.61%, which has decreased by 6.24% from last quarter's yield of 14.85%.

Cenovus Energy saw a decrease in earnings per share from 0.93 in Q2 to $0.62 now. Marathon Petroleum saw a decrease in earnings per share from 10.61 in Q2 to $7.81 now. Its most recent dividend yield is at 2.64%, which has ('', 'not changed') by 0.0% from 2.64% in the previous quarter.

Most recently, Barnwell Industries reported earnings per share at $0.25, whereas in Q2 earnings per share sat at $0.21. This quarter, NACCO Industries experienced a decrease in earnings per share, which was $5.07 in Q2 and is now $1.95. The company's most recent dividend yield sits at 1.61%, which has decreased by 0.14% from 1.75% 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.