Understanding Value Stocks
A value stock is traditionally defined in terms of how investors in the marketplace are valuing that company's future growth prospects. Low P/E multiples are good base indicators that the company is undervalued and can most likely be labelled as a value stock.
Benzinga Insights has compiled a list of value stocks in the financial services sector that may be worth watching:
- Norwood Financial (NASDAQ:NWFL) - P/E: 7.83
- Piper Sandler (NYSE:PIPR) - P/E: 7.87
- Enova International (NYSE:ENVA) - P/E: 5.09
- OFG Bancorp (NYSE:OFG) - P/E: 9.33
- X Financial (NYSE:XYF) - P/E: 1.41
Norwood Financial's earnings per share for Q1 sits at $0.87, whereas in Q4, they were at 0.81. The company's most recent dividend yield sits at 4.09%, which has decreased by 0.22% from 4.31% last quarter.
Piper Sandler saw a decrease in earnings per share from 7.84 in Q4 to $3.12 now. The company's most recent dividend yield sits at 2.01%, which has increased by 0.46% from 1.55% last quarter.
Most recently, Enova International reported earnings per share at $1.67, whereas in Q4 earnings per share sat at $1.61. OFG Bancorp has reported Q1 earnings per share at $0.76, which has increased by 15.15% compared to Q4, which was 0.66. Its most recent dividend yield is at 2.3%, which has increased by 0.14% from 2.16% in the previous quarter.
Most recently, X Financial reported earnings per share at $0.43, whereas in Q4 earnings per share sat at $0.51.
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.