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CIO or STAG: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of City Office REIT (CIO - Free Report) and Stag Industrial (STAG - Free Report) . 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, both City Office REIT and Stag Industrial are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.

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.

CIO currently has a forward P/E ratio of 12.84, while STAG has a forward P/E of 20.03. We also note that CIO has a PEG ratio of 2.14. 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. STAG currently has a PEG ratio of 4.31.

Another notable valuation metric for CIO is its P/B ratio of 2.33. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, STAG has a P/B of 2.43.

Based on these metrics and many more, CIO holds a Value grade of B, while STAG has a Value grade of D.

Both CIO and STAG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CIO is the superior value option right now.


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Stag Industrial, Inc. (STAG) - free report >>

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