What is a value stock?
A value stock traditionally has a lower price than stocks of companies in the same industry. This indicates that the company may be undervalued because investors are not showing as much interest in these companies. The most common way to check value is through the price/earnings multiple, or P/E. A low P/E multiple is a good indication that the stock is undervalued.
The following stocks are considered notable value stocks in the real estate sector:
- Jones Lang LaSalle JLL – PER: 8.19
- SL Green Realty SLG – PER: 8.7
- Alpine Income Prop Trust PINE – PER: 8.96
- Medical Properties Trust MPW – PER: 5.11
- Stratus Properties STRS – PER: 3.39
Earnings per share for Jones Lang LaSalle for Q2 sits at $4.48, while in Q1 it was 3.47. Most recently, the company announced a dividend yield of 1.08%, up 0.51% from last quarter’s 0.57% yield.
SL Green Realty reported Q3 earnings per share of $1.66, down 11.23% from Q2, which was 1.87. The company’s most recent dividend yield sits at 9.5%, up 1.55% from 7.95% last quarter.
Alpine Income Prop Trust saw its earnings per share fall from 0.47 in the second quarter to $0.4 now. Most recently, the company announced a dividend yield of 6.02%, up 0.08% from last quarter’s 5.94% yield.
Medical Properties Trust saw its earnings per share fall from 0.47 in the first quarter to $0.46 now. Its most recent dividend yield is 7.03%, up 0.84% from 6.19% in the prior quarter.
Stratus Properties’ earnings per share for the second quarter came in at $0.09, down from 0.23 in the first quarter.
Importance: A valuable security may need some time to rebound from its undervalued position. The risk of investing in a value stock is that this emergence never materializes.