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A Look Into Energy Sector Value Stocks

Understanding 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.

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

  1. Vermilion Energy NYSE:VET - P/E: 3.58
  2. SandRidge Energy NYSE:SD - P/E: 4.37
  3. Vista Energy NYSE:VIST - P/E: 6.38
  4. Antero Resources NYSE:AR - P/E: 5.67
  5. Ring Energy AMEX:REI - P/E: 2.33

Vermilion Energy's earnings per share for Q3 sits at $1.23, whereas in Q2, they were at 1.72. Most recently, the company reported a dividend yield of 1.46%, which has increased by 0.18% from last quarter's yield of 1.28%.

SandRidge Energy saw an increase in earnings per share from 1.32 in Q2 to $1.35 now. Vista Energy's earnings per share for Q3 sits at $0.75, whereas in Q2, they were at 1.06. Antero Resources's earnings per share for Q3 sits at $1.63, whereas in Q2, they were at 1.68. Ring Energy saw a decrease in earnings per share from 0.29 in Q2 to $0.28 now.

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.

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