PEB or OHI: Which Is the Better Value Stock Right Now?
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Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Pebblebrook Hotel (PEB) and Omega Healthcare Investors (OHI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Right now, Pebblebrook Hotel is sporting a Zacks Rank of #2 (Buy), while Omega Healthcare Investors has a Zacks Rank of #4 (Sell). This means that PEB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
PEB currently has a forward P/E ratio of 7.85, while OHI has a forward P/E of 14.51. We also note that PEB has a PEG ratio of 0.56. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. OHI currently has a PEG ratio of 1.26.
Another notable valuation metric for PEB is its P/B ratio of 0.55. 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, OHI has a P/B of 2.71.
Based on these metrics and many more, PEB holds a Value grade of A, while OHI has a Value grade of D.
PEB sticks out from OHI in both our Zacks Rank and Style Scores models, so value investors will likely feel that PEB is the better option right now.
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Pebblebrook Hotel Trust (PEB) : Free Stock Analysis Report
Omega Healthcare Investors, Inc. (OHI) : Free Stock Analysis Report