Investors interested in Real Estate - Operations stocks are likely familiar with TPG RE Finance Trust (TRTX) and WillScot (WSC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
TPG RE Finance Trust and WillScot are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TRTX is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 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.
TRTX currently has a forward P/E ratio of 7.54, while WSC has a forward P/E of 19.61. We also note that TRTX has a PEG ratio of 0.23. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WSC currently has a PEG ratio of 1.82.
Another notable valuation metric for TRTX is its P/B ratio of 0.60. 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, WSC has a P/B of 6.14.
These metrics, and several others, help TRTX earn a Value grade of B, while WSC has been given a Value grade of C.
TRTX stands above WSC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TRTX is the superior value option right now.
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