Understanding 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:
- AFC Gamma (NASDAQ:AFCG) - P/E: 8.07
- Transcontinental Realty (NYSE:TCI) - P/E: 4.49
- Ready Capital (NYSE:RC) - P/E: 4.64
- Five Point Holdings (NYSE:FPH) - P/E: 5.25
- Comstock Holding Co (NASDAQ:CHCI) - P/E: 6.08
AFC Gamma looks to be undervalued. It possesses an EPS of $0.49, which has not changed since last quarter (Q2). The company's most recent dividend yield sits at 15.82%, which has increased by 0.67% from 15.15% last quarter.
Transcontinental Realty's earnings per share for Q3 sits at $0.52, whereas in Q2, they were at 0.06. 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.
Five Point Holdings saw a decrease in earnings per share from 0.34 in Q2 to $0.09 now. Comstock Holding Co has reported Q3 earnings per share at $0.46, which has increased by 820.0% compared to Q2, which was 0.05.
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.