What is the current example of a value company
What is the current example of a value company and would you buy it as an investment. Why or why not?
Expert
An illustration of a value company would be Altria/Phillip Morris. Its its dividend is high, it is in saturation phase and not expected to grow much in future. Management there does not add a whole lot of value, and earnings do not have a lot of expected progress.
I would invest in its stock because historically the value stock have been seen to outperform the growth stocks. The claim that value stocks produce higher returns than growth stocks over time has been borne out by many studies. These studies objectively identify value stocks in slightly different ways, all of which are valid. Some studies advocate stocks with low P/E (price to earnings) ratios. The Other studies advocate buying stocks with high ratios of book value to the market value. Still others advocate purchasing stocks with high dividend rates. These are all different methods of identifying value stocks. All produce similar results when applied consistently over long periods of time.
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