Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Sunstone Hotel Investors (SHO) and Gaming and Leisure Properties (GLPI). 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.
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 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.
Sunstone Hotel Investors and Gaming and Leisure Properties are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that SHO's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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.
SHO currently has a forward P/E ratio of 11.82, while GLPI has a forward P/E of 12.86. We also note that SHO has a PEG ratio of 5.02. 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. GLPI currently has a PEG ratio of 5.53.
Another notable valuation metric for SHO is its P/B ratio of 1.15. 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, GLPI has a P/B of 2.91.
Based on these metrics and many more, SHO holds a Value grade of B, while GLPI has a Value grade of D.
SHO 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 SHO is likely the superior value option right now.
Sunstone Hotel Investors, Inc. (SHO) : 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.
