Understand value stocks
A value stock is traditionally defined in terms of how investors in the market evaluate the future growth prospects of that company. Low P/E multiples are good basic indicators that the company is undervalued and can most likely be labeled a value stock.
The following stocks are considered notable value stocks in the consumer defensive space:
- China Online Education Gr COE – P/E: 3.47
- Albertsons company ACI – P/E: 10.0
- Sunlands Technology STG – P/E: 0.72
- Herbalife Nutrition HLF – P/E: 7.04
- Newell brands NWL – P/E: 9.78
Most recently, China Online Education Gr reported earnings per share of -$0.67, while earnings per share for the first quarter were -$0.94. Albertsons Companies’ earnings per share for the first quarter is $1.0, while it was $0.75 for the fourth quarter. Most recently, the company reported a dividend yield of 1.81%, up 0.43% from last quarter’s 1.38% yield.
Sunlands Technology’s earnings per share for the second quarter were $1.26, compared to $2.14 for the first quarter. This quarter, Herbalife Nutrition reported a decline in earnings per share, which was $0.99 in the first quarter and is now $0.96. Its most recent dividend yield is 1.71%, down 1.82% from 3.53% in the previous quarter.
This quarter, Newell Brands saw an increase in earnings per share, which was $0.36 in the first quarter and is now $0.57. The company’s most recent dividend yield is 4.63%, up 0.68% from 3.95% last quarter.
The significance: A value stock can take time to recover from its undervalued position. The risk of investing in a value stock is that it may never happen.
