Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Cousins Properties (CUZ) and National Health Investors (NHI). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Cousins Properties has a Zacks Rank of #2 (Buy), while National Health Investors has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CUZ likely has seen a stronger improvement to its earnings outlook than NHI has recently. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
CUZ currently has a forward P/E ratio of 9.49, while NHI has a forward P/E of 15.93. We also note that CUZ has a PEG ratio of 2.57. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NHI currently has a PEG ratio of 4.40.
Another notable valuation metric for CUZ is its P/B ratio of 0.91. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, NHI has a P/B of 2.44.
These are just a few of the metrics contributing to CUZ's Value grade of B and NHI's Value grade of D.
CUZ sticks out from NHI in both our Zacks Rank and Style Scores models, so value investors will likely feel that CUZ is the better option right now.
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Cousins Properties Incorporated (CUZ): Free Stock Analysis Report National Health Investors, Inc. (NHI): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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