The Meaning Behind 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.

The following stocks are considered to be notable value stocks in the utilities sector:

1. China Recycling Energy CREG - P/E: 3.46
2. PG&E PCG - P/E: 4.17
3. Kenon Hldgs KEN - P/E: 3.25
4. Pampa Energia PAM - P/E: 2.92
5. Suburban Propane Partners SPH - P/E: 9.89

Most recently, China Recycling Energy reported earnings per share at -0.16, whereas in Q1 earnings per share sat at -0.09. China Recycling Energy does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

PG&E's earnings per share for Q2 sits at 0.27, whereas in Q1, they were at 0.23. Most recently, the company reported a dividend yield of 3.06%, which has decreased by 0.04% from last quarter's yield of 3.1%.

Kenon Hldgs saw an increase in earnings per share from 2.69 in Q4 to 3.34 now. Kenon Hldgs does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Pampa Energia has reported Q2 earnings per share at 1.94, which has increased by 234.48% compared to Q1, which was 0.58. Pampa Energia does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

Suburban Propane Partners's earnings per share for Q3 sits at -0.16, whereas in Q2, they were at 2.02. The company's most recent dividend yield sits at 8.56%, which has increased by 0.44% from 8.12% 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.