While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
Diversified Healthcare Trust (DHC) is a stock many investors are watching right now. DHC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.35. This compares to its industry's average Forward P/E of 15.42. Over the last 12 months, DHC's Forward P/E has been as high as 45.38 and as low as 5.77, with a median of 7.83.
Finally, investors will want to recognize that DHC has a P/CF ratio of 11.78. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. DHC's P/CF compares to its industry's average P/CF of 15.15. DHC's P/CF has been as high as 37.22 and as low as -189.90, with a median of 8.67, all within the past year.
Another great REIT and Equity Trust - Other stock you could consider is Pebblebrook Hotel Trust (PEB), which is a Zacks Rank of #1 (Strong Buy) stock with a Value Score of A.
Pebblebrook Hotel Trust is trading at a forward earnings multiple of 7.82 at the moment, with a PEG ratio of 1.49. This compares to its industry's average P/E of 15.42 and average PEG ratio of 1.94.
PEB's Forward P/E has been as high as 8.94 and as low as 4.77, with a median of 7.42. During the same time period, its PEG ratio has been as high as 2.03, as low as 0.50, with a median of 0.58.
Pebblebrook Hotel Trust also has a P/B ratio of 0.52 compared to its industry's price-to-book ratio of 1.81. Over the past year, its P/B ratio has been as high as 0.63, as low as 0.34, with a median of 0.50.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Diversified Healthcare Trust and Pebblebrook Hotel Trust are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DHC and PEB feels like a great value stock at the moment.
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Diversified Healthcare Trust (DHC): Free Stock Analysis Report Pebblebrook Hotel Trust (PEB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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