Quantcast

CXW or DLR: Which Is the Better Value Stock Right Now?


Shutterstock photo

Investors interested in REIT and Equity Trust - Other stocks are likely familiar with CCA (CXW) and Digital Realty Trust (DLR). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

CCA has a Zacks Rank of #2 (Buy), while Digital Realty Trust has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CXW likely has seen a stronger improvement to its earnings outlook than DLR has recently. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

CXW currently has a forward P/E ratio of 10.30, while DLR has a forward P/E of 17.55. We also note that CXW has a PEG ratio of 1.72. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DLR currently has a PEG ratio of 2.55.

Another notable valuation metric for CXW is its P/B ratio of 1.97. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, DLR has a P/B of 2.50.

These metrics, and several others, help CXW earn a Value grade of B, while DLR has been given a Value grade of D.

CXW has seen stronger estimate revision activity and sports more attractive valuation metrics than DLR, so it seems like value investors will conclude that CXW is the superior option right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Corrections Corp. of America (CXW): Free Stock Analysis Report

Digital Realty Trust, Inc. (DLR): Free Stock Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.



This article appears in: Investing , Investing Ideas , Stocks
Referenced Symbols: CXW , DLR



More from Zacks.com

Subscribe






Zacks.com
Contributor:

Zacks.com

Equity Research










Research Brokers before you trade

Want to trade FX?