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:

1. GEO Gr GEO - P/E: 8.93
2. Ellington Residential EARN - P/E: 7.82
3. Dynex Cap DX - P/E: 3.64
4. RPT Realty RPT - P/E: 6.4
5. Great Ajax AJX - P/E: 9.81

Most recently, GEO Gr reported earnings per share at 0.51, whereas in Q1 earnings per share sat at 0.39. Its most recent dividend yield is at 17.02%, which has decreased by 0.79% from 17.81% in the previous quarter.

Ellington Residential saw a decrease in earnings per share from 0.27 in Q1 to 0.26 now. Most recently, the company reported a dividend yield of 9.81%, which has decreased by 0.71% from last quarter’s yield of 10.52%.

Dynex Cap’s earnings per share for Q2 sits at 0.36, whereas in Q1, they were at 0.51. Most recently, the company reported a dividend yield of 10.25%, which has increased by 0.08% from last quarter’s yield of 10.17%.

RPT Realty saw a decrease in earnings per share from 0.26 in Q1 to 0.16 now. Most recently, the company reported a dividend yield of 6.13%, which has decreased by 0.11% from last quarter’s yield of 6.24%.

Great Ajax’s earnings per share for Q2 sits at 0.27, whereas in Q1, they were at 0.02. Its most recent dividend yield is at 7.8%, which has decreased by 0.32% from 8.12% 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.