5 Value Stocks To Watch In The Real Estate Sector

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.

The following stocks are considered to be notable value stocks in the real estate sector:

1. Western Asset Mortgage WMC - P/E: 2.24
2. New York Mortgage Trust NYMT - P/E: 6.51
3. Cedar Realty Trust CDR - P/E: 6.17
4. Ready Capital RC - P/E: 6.87
5. NexPoint Real Estate NREF - P/E: 5.55

Western Asset Mortgage's earnings per share for Q2 sits at 0.05, whereas in Q1, they were at 0.1. Most recently, the company reported a dividend yield of 9.49%, which has increased by 2.88% from last quarter's yield of 6.61%.

New York Mortgage Trust looks to be undervalued. It possesses an EPS of 0.11, which has not changed since last quarter (Q1). Most recently, the company reported a dividend yield of 9.41%, which has increased by 0.97% from last quarter's yield of 8.44%.

Cedar Realty Trust's earnings per share for Q2 sits at 0.61, whereas in Q1, they were at 0.62. The company's most recent dividend yield sits at 1.2%, which has decreased by 0.47% from 1.67% last quarter.

Ready Capital saw an increase in earnings per share from 0.41 in Q1 to 0.52 now. Most recently, the company reported a dividend yield of 11.22%, which has increased by 0.55% from last quarter's yield of 10.67%.

NexPoint Real Estate saw an increase in earnings per share from 0.53 in Q1 to 0.59 now. Most recently, the company reported a dividend yield of 9.79%, which has increased by 0.6% from last quarter's yield of 9.19%.

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.