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.
Benzinga Insights has compiled a list of value stocks in the real estate sector that may be worth watching:
- Franklin Street Props (AMEX:FSP) - P/E: 6.66
- Ready Capital (NYSE:RC) - P/E: 7.09
- Landsea Homes (NASDAQ:LSEA) - P/E: 9.83
- Nam Tai Property (NYSE:NTP) - P/E: 5.49
- Chimera Investment (NYSE:CIM) - P/E: 4.99
Most recently, Franklin Street Props reported earnings per share at $0.1, whereas in Q3 earnings per share sat at $0.14. This quarter, Ready Capital experienced an increase in earnings per share, which was $0.64 in Q3 and is now $0.67. The company's most recent dividend yield sits at 10.55%, which has decreased by 0.67% from 11.22% last quarter.
Landsea Homes's earnings per share for Q3 sits at $0.18, whereas in Q2, they were at 0.38. This quarter, Nam Tai Property experienced a decrease in earnings per share, which was $-0.01 in Q2 and is now $-0.11. The company's most recent dividend yield sits at 2.26%, which has decreased by 0.06% from 2.32% last quarter.
Chimera Investment saw an increase in earnings per share from 0.42 in Q3 to $0.46 now. Its most recent dividend yield is at 9.81%, which has increased by 1.36% from 8.45% 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.