Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Outfront Media (OUT) and $Public Storage(PSA-N)$ (PSA). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Outfront Media is sporting a Zacks Rank of #2 (Buy), while Public Storage has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that OUT has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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 11.07, while PSA has a forward P/E of 20.18. We also note that OUT has a PEG ratio of 1.11. 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. PSA currently has a PEG ratio of 5.61.
Another notable valuation metric for OUT is its P/B ratio of 5.12. 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, PSA has a P/B of 11.03.
These metrics, and several others, help OUT earn a Value grade of B, while PSA has been given a Value grade of D.
OUT has seen stronger estimate revision activity and sports more attractive valuation metrics than PSA, so it seems like value investors will conclude that OUT is the superior option right now.
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