Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Strawberry Fields REIT, Inc. (STRW) and Omega Healthcare Investors (OHI). But which of these two companies is the best option for those looking for undervalued stocks? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Strawberry Fields REIT, Inc. and Omega Healthcare Investors have a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
STRW currently has a forward P/E ratio of 9.20, while OHI has a forward P/E of 13.65. We also note that STRW has a PEG ratio of 1.15. 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 2.74.
Another notable valuation metric for STRW is its P/B ratio of 2.18. 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, OHI has a P/B of 2.35.
These metrics, and several others, help STRW earn a Value grade of A, while OHI has been given a Value grade of D.
Both STRW and OHI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that STRW is the superior value option right now.
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Strawberry Fields REIT, Inc. (STRW): Free Stock Analysis Report Omega Healthcare Investors, Inc. (OHI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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