Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Outfront Media (OUT) and Public Storage (PSA). But which of these two companies is the best option for those looking for undervalued stocks? 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 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.
Right now, Outfront Media is sporting a Zacks Rank of #2 (Buy), while Public Storage has a Zacks Rank of #3 (Hold). This means that OUT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
OUT currently has a forward P/E ratio of 9.70, while PSA has a forward P/E of 18.45. We also note that OUT has a PEG ratio of 0.97. 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. PSA currently has a PEG ratio of 5.07.
Another notable valuation metric for OUT is its P/B ratio of 5.67. 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, PSA has a P/B of 10.64.
Based on these metrics and many more, OUT holds a Value grade of A, while PSA has a Value grade of D.
OUT sticks out from PSA in both our Zacks Rank and Style Scores models, so value investors will likely feel that OUT is the better option right now.
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OUTFRONT Media Inc. (OUT): Free Stock Analysis Report Public Storage (PSA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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