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 stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Outfront Media has 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 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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
OUT currently has a forward P/E ratio of 10.23, while PSA has a forward P/E of 17.93. We also note that OUT has a PEG ratio of 1.02. 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 4.99.
Another notable valuation metric for OUT is its P/B ratio of 4.75. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, PSA has a P/B of 9.78.
Based on these metrics and many more, OUT holds a Value grade of B, while PSA has a Value grade of D.
OUT stands above PSA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that OUT is the superior value option right now.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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