Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Empire State Realty Trust (ESRT) and CubeSmart (CUBE). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Currently, Empire State Realty Trust has a Zacks Rank of #2 (Buy), while CubeSmart has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ESRT has an improving earnings outlook. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ESRT currently has a forward P/E ratio of 11.46, while CUBE has a forward P/E of 18.02. We also note that ESRT has a PEG ratio of 6.51. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CUBE currently has a PEG ratio of 8.23.
Another notable valuation metric for ESRT is its P/B ratio of 1.03. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CUBE has a P/B of 3.82.
These metrics, and several others, help ESRT earn a Value grade of B, while CUBE has been given a Value grade of D.
ESRT sticks out from CUBE in both our Zacks Rank and Style Scores models, so value investors will likely feel that ESRT is the better option right now.
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Today, See These 5 Potential Home Runs >>Empire State Realty Trust, Inc. (ESRT) : Free Stock Analysis Report
CubeSmart (CUBE) : 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.
