A Look Into Basic Materials 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.
Below is a list of notable value stocks in the basic materials sector:
- Westlake (NYSE:WLK) - P/E: 8.82
- SunCoke Energy (NYSE:SXC) - P/E: 8.16
- ArcelorMittal (NYSE:MT) - P/E: 3.89
- Ramaco Resources (NASDAQ:METCB) - P/E: 6.07
- Celanese (NYSE:CE) - P/E: 8.93
Westlake's earnings per share for Q1 sits at $3.05, whereas in Q4, they were at 1.79. Its most recent dividend yield is at 1.26%, which has increased by 0.11% from 1.15% in the previous quarter.
SunCoke Energy saw an increase in earnings per share from 0.14 in Q4 to $0.19 now. Most recently, the company reported a dividend yield of 4.28%, which has increased by 0.74% from last quarter's yield of 3.54%.
ArcelorMittal's earnings per share for Q1 sits at $1.27, whereas in Q4, they were at 0.3. Most recently, the company reported a dividend yield of 1.28%, which has increased by 0.51% from last quarter's yield of 0.77%.
Ramaco Resources's earnings per share for Q1 sits at $0.57, whereas in Q4, they were at 0.32. The company's most recent dividend yield sits at 5.8%, which has increased by 1.25% from 4.55% last quarter.
Celanese saw an increase in earnings per share from 1.44 in Q4 to $2.01 now. Most recently, the company reported a dividend yield of 2.26%, which has decreased by 0.3% from last quarter's yield of 2.56%.
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.