What is a Value Stock?
A value stock traditionally has a lower price when compared to stock prices of companies in the same industry. This indicates that the company may be undervalued, as investors are not expressing as much interest in such companies. The most commonly used way to check for value is with the price-to-earnings multiple, or P/E. A low P/E multiple is a good indication that the stock is undervalued.
The following stocks are considered to be notable value stocks in the real estate sector:
- Annaly Capital Management NLY - P/E: 4.26
- Redwood Trust RWT - P/E: 5.14
- Ready Capital RC - P/E: 8.08
- CTO Realty Growth CTO - P/E: 2.55
- ARMOUR Residential REIT ARR - P/E: 5.9
Annaly Capital Management's earnings per share for Q3 sits at 0.28, whereas in Q2, they were at 0.3. The company's most recent dividend yield sits at 10.33%, which has increased by 1.07% from 9.26% last quarter.
Redwood Trust saw a decrease in earnings per share from 0.66 in Q2 to 0.65 now. Its most recent dividend yield is at 6.85%, which has increased by 0.84% from 6.01% in the previous quarter.
Ready Capital's earnings per share for Q3 sits at 0.64, whereas in Q2, they were at 0.52. The company's most recent dividend yield sits at 11.22%, which has increased by 0.55% from 10.67% last quarter.
CTO Realty Growth's earnings per share for Q3 sits at 1.09, whereas in Q2, they were at 1.07. Most recently, the company reported a dividend yield of 7.28%, which has decreased by 0.1% from last quarter's yield of 7.38%.
ARMOUR Residential REIT's earnings per share for Q3 sits at 0.25, whereas in Q2, they were at 0.21. Its most recent dividend yield is at 12.05%, which has increased by 0.78% from 11.27% 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.
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