Value Stocks

What are value stocks?

One of the sweetest and most profitable pleasures of successful investing is to buy high-quality “value stocks” (or stocks that are reasonably priced, if not cheap, in relation to its sales, earnings or assets), then hold on to them as mainstream investors recognize the value and push up the share price.

Value stocks are stocks trading lower than their financial fundamentals suggest. They are perceived as undervalued, and have the potential to rise. Many new tech stocks, for instance, start out as growth stocks and transition into value stocks.

They have a low price-to-earnings and price-to-book ratios—which is why they’re less expensive than growth stocks. Due to this fundamental distinction, a value stock is often traded at a more affordable rate than a growth stock.

To investors, they see companies that fall into this category as undervalued. These investors are less likely to invest in a growth stock because they feel that value company’s stock will eventually reach their full potential once they are recognized by the market.

Generally speaking, the climb is steady for value stocks. The only other way for it to emerge into the market like a growth stock is for it to be a bit more innovative with its products or services.

Pat McKeough is an expert at delving into a company’s financial statements and identifying undervalued securities and value stocks. That’s because value stocks are the foundation of any long term investment strategy, at TSI Network we also recommend our three-part Successful Investor strategy:

  1. Invest mainly in well-established companies;
  2. Spread your money out across most if not all of the five main economic sectors (Manufacturing & Industry; Resources & Commodities; the Consumer sector; Finance; Utilities);
  3. Downplay or avoid stocks in the broker/media limelight.

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Value Stocks Post Archives

Dividend Investing vs. Value Investing

Dividend Investing vs. Value Investing

In choosing dividend investing vs value investing, it’s important to recognize that both can lead to favourable returns
To decide between dividend investing vs value investing, investors must first distinguish between the two. The best dividend stocks respond to tough economic times by doing their best to maintain,… Read More

Get a 6.4% yield from AT&T

Get a 6.4% yield from AT&T

This firm has paused its annual dividend increase this year in favour of additional debt repayments. We feel that’s prudent since the pandemic has hurt advertising revenue for its media operations.

In the meantime, the current high-yield dividend looks sustainable, and investors will benefit as… Read More

Get a 5.1% yield from IGM Financial

Get a 5.1% yield from IGM Financial

A rising stock market led to an 8.3% jump in revenue for this company during the most-recent quarter.  

Meanwhile, the stock trades at just 11.8 times the company’s 2021 earnings forecast.

IGM FINANCIAL INC. (Toronto symbol IGM; www.igmfinancial.com) is Canada’s largest independent mutual-fund provider. It also offers… Read More

Genuine Parts Co. just grew earnings 17.3%

Genuine Parts Co. just grew earnings 17.3%

Like other top industrial stocks, this company’s strong balance sheet should help it cope with economic shocks during the COVID-19 pandemic. That should generate further dividend hikes for investors in 2021 as the pandemic eases.

The company trades at an attractive 17.5 times its projected 2021… Read More