The Meaning Behind 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.
The following stocks are considered to be notable value stocks in the real estate sector:
- Ready Capital (NYSE:RC) - P/E: 7.17
- SL Green Realty (NYSE:SLG) - P/E: 7.94
- CTO Realty Growth (NYSE:CTO) - P/E: 2.79
- Realogy Holdings (NYSE:RLGY) - P/E: 6.07
- New Residential Inv (NYSE:NRZ) - P/E: 7.78
Ready Capital has reported Q3 earnings per share at 0.64, which has increased by 23.08% compared to Q2, which was 0.52. Most recently, the company reported a dividend yield of 10.55%, which has decreased by 0.67% from last quarter's yield of 11.22%.
SL Green Realty's earnings per share for Q3 sits at 1.78, whereas in Q2, they were at 1.6. Its most recent dividend yield is at 4.92%, which has decreased by 0.6% from 5.52% in the previous quarter.
This quarter, CTO Realty Growth experienced an increase in earnings per share, which was 1.07 in Q2 and is now 1.09. Its most recent dividend yield is at 7.28%, which has decreased by 0.1% from 7.38% in the previous quarter.
Realogy Holdings's earnings per share for Q3 sits at 0.99, whereas in Q2, they were at 1.33. Its most recent dividend yield is at 7.0%, which has increased by 4.0% from 3.0% in the previous quarter.
New Residential Inv saw an increase in earnings per share from 0.31 in Q2 to 0.44 now. Most recently, the company reported a dividend yield of 9.22%, which has decreased by 1.09% from last quarter's yield of 10.31%.
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.
