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.

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

1. Capital Product Partners CPLP - P/E: 5.04
2. L.B. Foster FSTR - P/E: 3.27
3. Nordic American Tankers NAT - P/E: 5.45
4. Rent-A-Center RCII - P/E: 9.91
5. GFL Environmental GFL - P/E: 1.59

Capital Product Partners’s earnings per share for Q3 sits at 0.41, whereas in Q2, they were at 0.46. Its most recent dividend yield is at 5.26%, which has decreased by 0.62% from 5.88% in the previous quarter.

This quarter, L.B. Foster experienced a decrease in earnings per share, which was 0.41 in Q2 and is now 0.09. The company’s most recent dividend yield sits at 1.57%, which has increased by 0.18% from 1.39% last quarter.

This quarter, Nordic American Tankers experienced a decrease in earnings per share, which was 0.33 in Q2 and is now -0.07. The company’s most recent dividend yield sits at 5.03%, which has decreased by 10.87% from 15.9% last quarter.

Rent-A-Center has reported Q3 earnings per share at 1.04, which has increased by 30.0% compared to Q2, which was 0.8. Most recently, the company reported a dividend yield of 3.81%, which has decreased by 0.65% from last quarter’s yield of 4.46%.

Most recently, GFL Environmental reported earnings per share at 0.13, whereas in Q2 earnings per share sat at 0.03. GFL Environmental 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.