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CXW vs. DLR: Which Stock Is the Better Value Option?


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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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

CCA and Digital Realty Trust are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CXW is likely seeing its earnings outlook improve to a greater extent. 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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CXW currently has a forward P/E ratio of 10.94, while DLR has a forward P/E of 18.80. We also note that CXW has a PEG ratio of 1.82. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DLR currently has a PEG ratio of 2.73.

Another notable valuation metric for CXW is its P/B ratio of 2.10. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, DLR has a P/B of 2.68.

These are just a few of the metrics contributing to CXW's Value grade of A and DLR's Value grade of D.

CXW stands above DLR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CXW is the superior value option right now.


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

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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



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