Understanding Value Stocks
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 labelled as a value stock.
Below is a list of notable value stocks in the real estate sector:
- Medical Properties Trust (NYSE:MPW) - P/E: 6.22
- Amrep (NYSE:AXR) - P/E: 4.63
- BrightSpire Capital (NYSE:BRSP) - P/E: 7.64
- Ready Capital (NYSE:RC) - P/E: 5.28
- Cherry Hill Mortgage (NYSE:CHMI) - P/E: 2.41
Medical Properties Trust's earnings per share for Q3 sits at $0.45, whereas in Q2, they were at 0.46. Most recently, the company reported a dividend yield of 10.32%, which has increased by 3.29% from last quarter's yield of 7.03%.
Most recently, Amrep reported earnings per share at $0.68, whereas in Q1 earnings per share sat at $0.36. Most recently, BrightSpire Capital reported earnings per share at $0.25, whereas in Q2 earnings per share sat at $0.24. Most recently, the company reported a dividend yield of 11.58%, which has increased by 2.13% from last quarter's yield of 9.45%.
Ready Capital has reported Q3 earnings per share at $0.44, which has decreased by 4.35% compared to Q2, which was 0.46. Its most recent dividend yield is at 12.37%, which has decreased by 0.3% from 12.67% in the previous quarter.
Cherry Hill Mortgage's earnings per share for Q3 sits at $0.26, whereas in Q2, they were at 0.28. The company's most recent dividend yield sits at 18.56%, which has increased by 1.53% from 17.03% 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.