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 labeled as a value stock.

The following stocks are considered to be notable value stocks in the real estate sector:

1. Manhattan Bridge Capital (NASDAQ:LOAN) - P/E: 9.15
2. Ellington Residential (NYSE:EARN) - P/E: 7.87
3. Kimco Realty (NYSE:KIM) - P/E: 5.09
4. Piedmont Office Realty (NYSE:PDM) - P/E: 4.44
5. Dynex Cap (NYSE:DX) - P/E: 3.82

Most recently, Manhattan Bridge Capital reported earnings per share at 0.12, whereas in Q2 earnings per share sat at 0.11. Most recently, the company reported a dividend yield of 9.41%, which has decreased by 0.37% from last quarter’s yield of 9.78%.

Ellington Residential has reported Q2 earnings per share at 0.26, which has decreased by 3.7% compared to Q1, which was 0.27. Its most recent dividend yield is at 9.81%, which has decreased by 0.71% from 10.52% in the previous quarter.

Kimco Realty saw a decrease in earnings per share from 0.37 in Q1 to 0.24 now. Most recently, the company reported a dividend yield of 3.34%, which has decreased by 2.24% from last quarter’s yield of 5.58%.

Piedmont Office Realty has reported Q2 earnings per share at 0.49, which has increased by 4.26% compared to Q1, which was 0.47. The company’s most recent dividend yield sits at 5.24%, which has increased by 0.34% from 4.9% last quarter.

Most recently, Dynex Cap reported earnings per share at 0.36, whereas in Q1 earnings per share sat at 0.51. Its most recent dividend yield is at 9.71%, which has decreased by 0.54% from 10.25% in the previous quarter.

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.