In search of Wall St. bargains

Q: Are there any stocks still undervalued now?

A: Corporate earnings have exhibited pretty impressive growth as a whole over the past few years, so the market’s performance is somewhat justified. However, many stocks do look to be rather expensive right now — particularly in the tech sector. Yet some bargains remain.

One of my favorite “cheap” stocks right now is AT&T, even after shares popped following the company’s strong quarterly report. The telecom giant pays a dividend yielding more than 5% and has increased its dividend for more than 25 consecutive years.

Despite a low price-to-earnings multiple of just 13 times 2017’s expected earnings, AT&T has room to grow.

The real estate sector has some compelling bargains as well. Not only has the sector been beatendown as interest rates have been rising, but REITs that invest in certain property types have faced headwinds. For example, retailers are struggling, so most REITs that invest in those properties have fallen. However, not all have exposure to troubled retailers.

Realty Income is one example. The company invests in retail properties resistant to e-commerce and recessions. The stock, which pays a 4.4% dividend yield in monthly installments, has fallen by 17% over the past year.