Benzinga | Oct 28, 2021 11:35AM EDT

5 Value Stocks To Watch In The Energy Sector

What is a Value Stock?

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 energy sector:

2 Energy Transfer (NYSE:ET) - P/E: 7.15

4 Star Group (NYSE:SGU) - P/E: 6.27

6 Alliance Resource (NASDAQ:ARLP) - P/E: 9.9

8 BP Midstream Partners (NYSE:BPMP) - P/E: 8.62

10 VAALCO Energy (NYSE:EGY) - P/E: 9.18

This quarter, Energy Transfer experienced a decrease in earnings per share, which was 1.21 in Q1 and is now 0.2. The company's most recent dividend yield sits at 6.11%, which has decreased by 0.01% from 6.12% last quarter.

Star Group saw a decrease in earnings per share from 1.71 in Q2 to -0.3 now. Its most recent dividend yield is at 5.35%, which has increased by 0.32% from 5.03% in the previous quarter.

Alliance Resource's earnings per share for Q3 sits at 0.44, whereas in Q2, they were at 0.34. Most recently, the company reported a dividend yield of 6.88%, which has increased by 1.41% from last quarter's yield of 5.47%.

BP Midstream Partners's earnings per share for Q2 sits at 0.37, whereas in Q1, they were at 0.39. Most recently, the company reported a dividend yield of 10.13%, which has increased by 0.33% from last quarter's yield of 9.8%.

VAALCO Energy's earnings per share for Q2 sits at 0.14, whereas in Q1, they were at 0.15. VAALCO Energy does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.

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.