Understanding Value Stocks
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.
Benzinga Insights has compiled a list of value stocks in the real estate sector that may be worth watching:
- Newmark Group NMRK - P/E: 7.37
- Apartment Income REIT AIRC - P/E: 5.77
- Ready Capital RC - P/E: 5.01
- Hersha Hospitality HT - P/E: 4.41
- Annaly Capital Management NLY - P/E: 2.95
Newmark Group saw a decrease in earnings per share from 0.46 in Q2 to $0.35 now. Most recently, the company reported a dividend yield of 1.28%, which has increased by 0.24% from last quarter's yield of 1.04%.
Apartment Income REIT saw a decrease in earnings per share from 0.66 in Q2 to $0.58 now. Most recently, the company reported a dividend yield of 4.68%, which has increased by 0.5% from last quarter's yield of 4.18%.
Ready Capital's earnings per share for Q3 sits at $0.44, whereas in Q2, they were at 0.46. Its most recent dividend yield is at 12.37%, which has decreased by 0.3% from 12.67% in the previous quarter.
This quarter, Hersha Hospitality experienced a decrease in earnings per share, which was $0.56 in Q2 and is now $0.33. This quarter, Annaly Capital Management experienced a decrease in earnings per share, which was $1.2 in Q2 and is now $1.06. Most recently, the company reported a dividend yield of 16.52%, which has increased by 3.17% from last quarter's yield of 13.35%.
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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