Overview Of Value Stocks In The Energy Sector

What are 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.

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

1. Petrobras Brasileiro PBR - P/E: 2.99
2. SandRidge Energy SD - P/E: 2.72
3. Antero Resources AR - P/E: 5.44
4. Pembina Pipeline PBA - P/E: 8.09
5. Overseas Shipholding Gr OSG - P/E: 8.13

Most recently, Petrobras Brasileiro reported earnings per share at $0.9, whereas in Q1 earnings per share sat at $1.12. This quarter, SandRidge Energy experienced a decrease in earnings per share, which was $0.69 in Q1 and is now $0.38. Antero Resources saw a decrease in earnings per share from 0.5 in Q1 to $-0.28 now. Pembina Pipeline has been featured as a value stock. Pembina Pipeline's Q2 EPS sits at $0.45, which has not changed since last quarter (Q1). Its most recent dividend yield is at 6.53%, which has increased by 0.31% from 6.22% in the previous quarter.

Overseas Shipholding Gr has reported Q2 earnings per share at $0.15, which has increased by 7.14% compared to Q1, which was 0.14.

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.