What Defines 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 financial services sector:

1. OP Bancorp OPBK - P/E: 6.94
2. Salisbury Bancorp SAL - P/E: 8.8
3. Eagle Bancorp Montana EBMT - P/E: 8.22
4. QCR Holdings QCRH - P/E: 8.14
5. CURO Group Holdings CURO - P/E: 3.04

Most recently, OP Bancorp reported earnings per share at 0.16, whereas in Q1 earnings per share sat at 0.21. Its most recent dividend yield is at 4.38%, which has increased by 0.49% from 3.89% in the previous quarter.

Salisbury Bancorp has reported Q2 earnings per share at 0.96, which has increased by 33.33% compared to Q1, which was 0.72. The company’s most recent dividend yield sits at 3.2%, which has decreased by 0.17% from 3.37% last quarter.

Eagle Bancorp Montana has reported Q2 earnings per share at 0.84, which has increased by 47.37% compared to Q1, which was 0.57. The company’s most recent dividend yield sits at 2.41%, which has increased by 0.07% from 2.34% last quarter.

QCR Holdings saw an increase in earnings per share from 0.77 in Q1 to 0.88 now. The company’s most recent dividend yield sits at 0.77%, which has decreased by 0.09% from 0.86% last quarter.

CURO Group Holdings’s earnings per share for Q2 sits at 0.53, whereas in Q1, they were at 0.77. CURO Group Holdings 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.