What are 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.
Below is a list of notable value stocks in the real estate sector:
- NexPoint Real Estate (NYSE:NREF) - P/E: 4.95
- Tremont Mortgage (NASDAQ:TRMT) - P/E: 5.62
- GEO Group (NYSE:GEO) - P/E: 6.11
- Optibase (NASDAQ:OBAS) - P/E: 8.76
- Piedmont Office Realty (NYSE:PDM) - P/E: 9.95
NexPoint Real Estate saw a decrease in earnings per share from 0.55 in Q4 to 0.53 now. The company's most recent dividend yield sits at 9.19%, which has decreased by 1.6% from 10.79% last quarter.
This quarter, Tremont Mortgage experienced a decrease in earnings per share, which was 0.28 in Q4 and is now 0.27. Tremont Mortgage does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
This quarter, GEO Group experienced an increase in earnings per share, which was 0.05 in Q4 and is now 0.44. The company's most recent dividend yield sits at 11.16%, which has decreased by 0.86% from 12.02% last quarter.
Optibase's earnings per share for Q4 sits at -0.12, whereas in Q3, they were at 1.0. Optibase does not have a dividend yield, which investors should be aware of when considering holding onto such a stock.
Most recently, Piedmont Office Realty reported earnings per share at 0.48, whereas in Q4 earnings per share sat at 0.46. The company's most recent dividend yield sits at 4.59%, which has decreased by 0.79% from 5.38% last 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.