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Highlights
- Value stocks are companies with a relatively lower price-earnings ratio (P/E ratio)
- Well-established business and a constant growth rate are some of the features of value stocks
- BSL, FMG, SFR, and RIO are four stocks from the ASX materials sector that have lower P/E than the sector benchmark index
Companies trading on stock exchanges with lower prices than their earnings and long-term growth potential are known as value stocks. These are companies with a relatively lower price-earnings ratio (P/E ratio).
Investors willing to invest in stocks priced less than their worth can look at a few basic characteristics for screening out value stocks.
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This article will discuss four stocks from the materials sector with a comparatively lower P/E ratio than the sector index (7.73).
BlueScope Steel Limited (ASX:BSL)
BlueScope is one of the prominent global manufacturers of painted and coated steel products with a diverse portfolio in several countries. Last month, the company completed the acquisition of the Coil Coatings business from Cornerstone Building Brands, Inc. The new business will now run as BlueScope Coated Products.
Trading with a share price of AU$16.470, BSL has a P/E ratio of 3.19. Its annual dividend yield is 4.41%.
Fortescue Metals Group Ltd (ASX:FMG)
Fortescue runs an iron ore business based in Western Australia, popular for its invention and major development of infrastructure and mining assets. Last month, the company partnered with Liebherr, a multinational firm engaged in equipment manufacturing. Under the deal, FMG will purchase green mining haul trucks from Liebherr.
FMG has a P/E ratio of 3.94 and an annual dividend yield of 17.46%. It is trading at AU$17.850.
Sandfire Resources Ltd (ASX:SFR)
Sandfire Resources is operating a mining business committed to superior levels of safety, sustainability, and responsibility. It is an international and diversified enterprise company. In the quarter ended 31 March 2022, SFR completed the acquisition of MATSA Mining Operation in Spain. Group EBITDA for the period was US$186.9 million.
Shares of SFR are priced at AU$4.080, with a P/E ratio of 4.46 and an annual dividend yield of 7.39%.
Rio Tinto Ltd (ASX:RIO)
Rio Tinto is a mining and metals company involved in the production of essential materials. It holds operations across 35 countries around the globe. During the second quarter of FY22, the company's iron ore production grew by 4% compared to the previous corresponding period, and mined copper production grew by 9%.
RIO's yearly dividend yield is 14.86%. Trading at AU$98.450, the company's P/E ratio is 4.99.
