A Look Into Real Estate Sector Value Stocks
What is a Value Stock?
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:
- American Realty Investors (NYSE:ARL) - P/E: 5.48
- Arbor Realty Trust (NYSE:ABR) - P/E: 8.69
- Rithm Capital (NYSE:RITM) - P/E: 7.5
- Forestar Group (NYSE:FOR) - P/E: 9.96
- AFC Gamma (NASDAQ:AFCG) - P/E: 7.61
American Realty Investors saw an increase in earnings per share from 0.11 in Q2 to $0.18 now. This quarter, Arbor Realty Trust experienced a decrease in earnings per share, which was $0.57 in Q2 and is now $0.55. Its most recent dividend yield is at 13.43%, which has increased by 2.78% from 10.65% in the previous quarter.
This quarter, Rithm Capital experienced a decrease in earnings per share, which was $0.62 in Q2 and is now $0.58. Most recently, the company reported a dividend yield of 9.6%, which has decreased by 0.45% from last quarter's yield of 10.05%.
Forestar Group saw an increase in earnings per share from 0.93 in Q3 to $1.44 now. AFC Gamma looks to be undervalued. It possesses an EPS of $0.49, which has not changed since last quarter (Q2). Its most recent dividend yield is at 15.82%, which has increased by 0.67% from 15.15% 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.
