Trading below book value and paying dividends are two key characteristics of value stocks, and these are what qualify three real estate investment trusts (REITs): Dynex Capital Inc. (NYSE: DX), Harsha Hospitality Trust (NYSE: HT) and RPT Realty (NYSE:RPT) may be worth a closer look for investors looking for those qualities.
No guarantees of profitability exist, and value stocks can remain depressed longer than pleasant, but with these, you get to reap the dividends while you wait. The idea developed by the great investor Benjamin Graham in his books “intelligent investor” And “Security Analysis”It is there that, ultimately, the market ascertains value.
Dynex Capital is a mortgage REIT with a market capitalization of $674 million that is now trading at a 27% discount to its book value. The company has a Price to Earnings (P/E) ratio of 3.35 and a Price to Free Cash Flow metric of 12.49. Over the past five years, funds from operations grew by 18% and last year’s growth came in at 14.2%.
Dynex Capital pays a dividend of 13.03%.
Hersha Hospitality Trust is a hotel and motel real estate investment trust with a market capitalization of $278 million, a relatively low figure for the sector. The shares are available for purchase only at 40% of the book value. The REIT is trading with a price-to-earnings ratio of 2.33, one of the lowest P/Es in the group. Funds from operations grew 284% over the last 12 months and 27.8% over the last five years.
It has a relatively low turnover for a New York Stock Exchange (NYSE) security, with an average daily volume of 428,000 shares. Harsha Hospitality Trust pays a dividend of 2.92%.
RPT is a retail REIT focused on a portfolio of mostly open-air shopping centers across the country. It trades with a price-to-earnings ratio of 10 and at a 7% discount to its book value. The market capitalization is $861 million. The Price to Free Cash Flows for the REIT is 12.79.
Funds from operations to grow by 19.7% in 2022 and 2.8% over the past five years. RPT’s average daily trading volume is 463,000 shares, a relatively light figure on the NYSE. The company is paying a dividend of 5.86%.
These real estate investment trusts are subject to interest rate moves made by the Federal Reserve in efforts to reduce inflation. Investors would be wise to keep an eye on this very important sector for the sector.
Not investment advice. For educational purposes only.
Weekly REIT Report: REITs are one of the most misunderstood investment options, making it difficult for investors to spot incredible opportunities until it’s too late. Benzinga’s in-house real estate research team is hard at work identifying the biggest opportunities in today’s market, which you can access for free by signing up. Benzinga’s Weekly REIT Report.
Don’t miss real-time alerts on your stocks – Join benzinga pro to free! Try the tool that will help you invest smarter, faster and smarter,
this article 3 Dividend-Paying REITs Trading Below Book Value originally appeared benzinga.com
,
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.