Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Hudson Pacific Properties (HPP) or NETSTREIT (NTST). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Hudson Pacific Properties and NETSTREIT are sporting Zacks Ranks of #1 (Strong 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 HPP is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
HPP currently has a forward P/E ratio of 13.80, while NTST has a forward P/E of 14.07. We also note that HPP has a PEG ratio of 1.17. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. NTST currently has a PEG ratio of 2.37.
Another notable valuation metric for HPP is its P/B ratio of 0.3. 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, NTST has a P/B of 1.25.
Based on these metrics and many more, HPP holds a Value grade of B, while NTST has a Value grade of C.
HPP stands above NTST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HPP is the superior value option right now.
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NETSTREIT Corp. (NTST) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
