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Annaly Capital Management Inc (NLY) - free report >>
HA Sustainable Infrastructure Capital, Inc. (HASI) - free report >>
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Annaly Capital Management Inc (NLY) - free report >>
HA Sustainable Infrastructure Capital, Inc. (HASI) - free report >>
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NLY vs. HASI: Which Stock Is the Better Value Option?
Investors interested in stocks from the REIT and Equity Trust sector have probably already heard of Annaly Capital Management (NLY - Free Report) and Hannon Armstrong (HASI - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Annaly Capital Management has a Zacks Rank of #2 (Buy), while Hannon Armstrong has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NLY is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
NLY currently has a forward P/E ratio of 6.24, while HASI has a forward P/E of 20.49. We also note that NLY has a PEG ratio of 1.25. 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. HASI currently has a PEG ratio of 1.99.
Another notable valuation metric for NLY is its P/B ratio of 1.15. 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, HASI has a P/B of 2.28.
These are just a few of the metrics contributing to NLY's Value grade of A and HASI's Value grade of F.
NLY stands above HASI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NLY is the superior value option right now.