Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both DiamondRock Hospitality (DRH) and Gaming and Leisure Properties (GLPI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
DiamondRock Hospitality has a Zacks Rank of #2 (Buy), while Gaming and Leisure Properties has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that DRH likely has seen a stronger improvement to its earnings outlook than GLPI has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
DRH currently has a forward P/E ratio of 8.27, while GLPI has a forward P/E of 13.21. We also note that DRH has a PEG ratio of 4.75. 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. GLPI currently has a PEG ratio of 5.07.
Another notable valuation metric for DRH is its P/B ratio of 1.03. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, GLPI has a P/B of 3.01.
Based on these metrics and many more, DRH holds a Value grade of B, while GLPI has a Value grade of D.
DRH is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that DRH is likely the superior value option right now.
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See Stocks Now >>DiamondRock Hospitality Company (DRH) : Free Stock Analysis Report
Gaming and Leisure Properties, Inc. (GLPI) : 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.
