What are 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.
Below is a list of notable value stocks in the financial services sector:
- UBS Group (NYSE:UBS) – P/E: 8.17
- Community Financial (NASDAQ:TCFC) – P/E: 9.68
- OneMain Holdings (NYSE:OMF) – P/E: 5.6
- Norwood Financial (NASDAQ:NWFL) – P/E: 9.35
- Merchants Bancorp (NASDAQ:MBIN) – P/E: 5.63
This quarter, UBS Group experienced an increase in earnings per share, which was 0.49 in Q1 and is now 0.55. UBS Group does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Most recently, Community Financial reported earnings per share at 1.1, whereas in Q1 earnings per share sat at 1.07. Its most recent dividend yield is at 1.73%, which has decreased by 0.01% from 1.74% in the previous quarter.
OneMain Holdings has reported Q2 earnings per share at 2.66, which has decreased by 21.07% compared to Q1, which was 3.37. OneMain Holdings does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
This quarter, Norwood Financial experienced an increase in earnings per share, which was 0.67 in Q1 and is now 0.7. The company’s most recent dividend yield sits at 4.1%, which has decreased by 0.02% from 4.12% last quarter.
This quarter, Merchants Bancorp experienced a decrease in earnings per share, which was 2.02 in Q1 and is now 1.58. The company’s most recent dividend yield sits at 1.02%, which has increased by 0.18% from 0.84% last quarter.
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.
