5 Value Stocks In The Energy Sector

The Meaning Behind Value Stocks

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.

Benzinga Insights has compiled a list of value stocks in the energy sector that may be worth watching:

1. Ring Energy REI - P/E: 1.99
2. Eni E - P/E: 3.03
3. Alliance Res Partners ARLP - P/E: 6.25
4. Peabody Energy BTU - P/E: 3.02
5. Canadian Natural Res CNQ - P/E: 7.29

Ring Energy's earnings per share for Q3 sits at $0.28, whereas in Q2, they were at 0.29. Eni saw a decrease in earnings per share from 2.28 in Q2 to $2.13 now. Its most recent dividend yield is at 3.46%, which has decreased by 0.13% from 3.59% in the previous quarter.

Most recently, Alliance Res Partners reported earnings per share at $1.25, whereas in Q2 earnings per share sat at $1.23. Most recently, the company reported a dividend yield of 8.32%, which has increased by 0.84% from last quarter's yield of 7.48%.

Peabody Energy has reported Q3 earnings per share at $2.34, which has decreased by 8.24% compared to Q2, which was 2.55. Most recently, the company reported a dividend yield of 3.67%, which has increased by 0.67% from last quarter's yield of 3.0%.

Canadian Natural Res has reported Q3 earnings per share at $2.37, which has decreased by 7.06% compared to Q2, which was 2.55.

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.