Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Alpine Income (PINE) and Sunstone Hotel Investors (SHO). But which of these two companies is the best option for those looking for undervalued stocks? 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Alpine Income has a Zacks Rank of #1 (Strong Buy), while Sunstone Hotel Investors has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PINE has an improving earnings outlook. But this is only part of the picture 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
PINE currently has a forward P/E ratio of 9.53, while SHO has a forward P/E of 15.18. We also note that PINE has a PEG ratio of 1.59. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SHO currently has a PEG ratio of 6.33.
Another notable valuation metric for PINE is its P/B ratio of 0.85. 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, SHO has a P/B of 1.32.
These metrics, and several others, help PINE earn a Value grade of B, while SHO has been given a Value grade of C.
PINE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that PINE is likely the superior value option right now.
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Free: See Our Top Stock And 4 Runners UpAlpine Income Property Trust, Inc. (PINE) : Free Stock Analysis Report
Sunstone Hotel Investors, Inc. (SHO) : Free Stock Analysis Report
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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.
