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. NexPoint Residential NXRT - P/E: 8.19
2. GEO Gr GEO - P/E: 8.86
3. Piedmont Office Realty PDM - P/E: 4.88
4. RPT Realty RPT - P/E: 6.86
5. Ellington Residential EARN - P/E: 7.74

NexPoint Residential’s earnings per share for Q2 sits at 0.59, whereas in Q1, they were at 0.53. Its most recent dividend yield is at 3.3%, which has decreased by 0.84% from 4.14% in the previous quarter.

This quarter, GEO Gr experienced an increase in earnings per share, which was 0.39 in Q1 and is now 0.51. The company’s most recent dividend yield sits at 17.02%, which has decreased by 0.79% from 17.81% last quarter.

Piedmont Office Realty’s earnings per share for Q2 sits at 0.49, whereas in Q1, they were at 0.47. Most recently, the company reported a dividend yield of 5.24%, which has increased by 0.34% from last quarter’s yield of 4.9%.

This quarter, RPT Realty experienced a decrease in earnings per share, which was 0.26 in Q1 and is now 0.16. The company’s most recent dividend yield sits at 6.13%, which has decreased by 0.11% from 6.24% last quarter.

Ellington Residential’s earnings per share for Q2 sits at 0.26, whereas in Q1, they were at 0.27. Its most recent dividend yield is at 9.81%, which has decreased by 0.71% from 10.52% 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.