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.
Benzinga Insights has compiled a list of value stocks in the real estate sector that may be worth watching:
- Power REIT (AMEX:PW) - P/E: 5.54
- Altisource Portfolio (NASDAQ:ASPS) - P/E: 5.95
- Broadmark Realty Capital (NYSE:BRMK) - P/E: 8.27
- Rithm Capital (NYSE:RITM) - P/E: 4.35
- Alset (NASDAQ:AEI) - P/E: 0.72
Most recently, Power REIT reported earnings per share at $0.34, whereas in Q2 earnings per share sat at $0.41. Altisource Portfolio looks to be undervalued. It possesses an EPS of $-0.7, which has not changed since last quarter (Q2). Broadmark Realty Capital's earnings per share for Q3 sits at $0.12, whereas in Q2, they were at 0.16. The company's most recent dividend yield sits at 10.8%, which has increased by 2.58% from 8.22% last quarter.
Rithm Capital's earnings per share for Q3 sits at $0.32, whereas in Q2, they were at 0.31. Its most recent dividend yield is at 11.19%, which has decreased by 0.19% from 11.38% in the previous quarter.
This quarter, Alset experienced a decrease in earnings per share, which was $-0.07 in Q2 and is now $-0.08.
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.