The ASX share with 'attractive dividend yield' trading at a 'meaningful discount'

An expert recommends a stock that's now trading for less than what the company's real estate assets are worth.

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How does a stock returning a 6.16% dividend yield sound?

How about adding that the share price has cooled off more than 9.2% over seven weeks?

Sounds pretty good, right?

Well, that's exactly the golden buying opportunity that Bell Potter Securities private wealth advisor Christopher Watt has identified.

Read on for his tip:

If you buy this stock now, you're paying less than its assets

Watt currently counts real estate investment trust GPT Group (ASX: GPT) as a buy.

"This diversified property group owns and actively manages a $27.4 billion portfolio of high quality Australian office, logistics and retail assets," Watt told The Bull.

"The company's businesses diversify income."

After the aforementioned fall in valuation, the stock is now actually trading at below what its property assets are worth.

As of the end of last December, its holdings were worth $5.98 per share.

Compare that to the Monday closing price of $4.07 for GPT shares, and arguably you have a bargain buy.

"The stock was recently trading at a meaningful discount to net tangible assets," said Watt.

"It offers an attractive dividend yield, underpinned by strong occupancy rates across the portfolio."

Although real estate is struggling after 12 interest rate rises over the past 13 months, many experts reckon the sector might have hit the bottom already.

The team at Market Matters have been bullish on Australian property stocks for a while now.

"In April, we looked at the Australian property sector, concluding that we felt that value was returning to the sector following its more than 30% correction since January 2022," it stated in a newsletter earlier this month.

Although the so-called "mortgage cliff" of a massive cohort of fixed rate borrowers being forced onto high variable rates is imminent, the analysts thought real estate share prices have now factored that in.

"History tells us that markets move ahead of fundamental news and this is starting to look the case with property as auction rates improve," read the Market Matters memo.

"Assuming Australian property has found or is 'looking for a low', the property sector is likely to enjoy a meaningful bounce or more."

Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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