What is the characteristic of value stocks?

Value stocks are characterized by having low price-earnings (P/E) ratios. This ratio is a measure of a company's current share price relative to its earnings per share. A low P/E ratio suggests that a stock is undervalued compared to its earnings, indicating that investors might be able to buy it at a bargain price relative to its actual earnings potential.

Investors often seek out value stocks as they may have the potential for price appreciation when the market eventually recognizes their true value. This characteristic distinguishes them from growth stocks, which typically have higher P/E ratios due to expectations of future growth. High dividends may be associated with value stocks, but the defining factor is primarily the low P/E ratio, making it the key characteristic of value stocks. High volatility is generally associated with riskier investments, not value stocks, which are often considered more stable in comparison to their growth counterparts.