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Overview Of Value Stocks In The Real Estate Sector


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:

  1. PennyMac Mortgage PMT – P/E: 8.56
  2. Presidio Property Trust SQFT – P/E: 0.72
  3. Ready Capital RC – P/E: 3.89
  4. Transcontinental Realty TCI – P/E: 5.11
  5. American Realty Investors ARL – P/E: 7.27

This quarter, PennyMac Mortgage experienced a decrease in earnings per share, which was $0.51 in Q3 and is now $0.44. Most recently, the company reported a dividend yield of 10.92%, which has decreased by 1.04% from last quarter’s yield of 11.96%.

This quarter, Presidio Property Trust experienced an increase in earnings per share, which was $-0.02 in Q2 and is now $-0.01. Most recently, the company reported a dividend yield of 10.22%, which has decreased by 1.89% from last quarter’s yield of 12.11%.

Most recently, Ready Capital reported earnings per share at $0.28, whereas in Q2 earnings per share sat at $0.35. The company’s most recent dividend yield sits at 10.7%, which has decreased by 2.34% from 13.04% last quarter.

Transcontinental Realty has reported Q3 earnings per share at $0.52, which has increased by 766.67% compared to Q2, which was 0.06. American Realty Investors saw an increase in earnings per share from 0.11 in Q2 to $0.18 now.

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.


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