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AAT vs. O: Which Stock Is the Better Value Option?
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Investors interested in REIT and Equity Trust - Retail stocks are likely familiar with American Assets Trust (AAT - Free Report) and Realty Income Corp. (O - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
American Assets Trust has a Zacks Rank of #2 (Buy), while Realty Income Corp. 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 AAT 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
AAT currently has a forward P/E ratio of 11.20, while O has a forward P/E of 15.94. We also note that AAT has a PEG ratio of 1.44. 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. O currently has a PEG ratio of 5.01.
Another notable valuation metric for AAT is its P/B ratio of 1.33. 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, O has a P/B of 1.47.
These are just a few of the metrics contributing to AAT's Value grade of B and O's Value grade of F.
AAT 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 AAT is likely the superior value option right now.
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AAT vs. O: Which Stock Is the Better Value Option?
Investors interested in REIT and Equity Trust - Retail stocks are likely familiar with American Assets Trust (AAT - Free Report) and Realty Income Corp. (O - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
American Assets Trust has a Zacks Rank of #2 (Buy), while Realty Income Corp. 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 AAT 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
AAT currently has a forward P/E ratio of 11.20, while O has a forward P/E of 15.94. We also note that AAT has a PEG ratio of 1.44. 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. O currently has a PEG ratio of 5.01.
Another notable valuation metric for AAT is its P/B ratio of 1.33. 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, O has a P/B of 1.47.
These are just a few of the metrics contributing to AAT's Value grade of B and O's Value grade of F.
AAT 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 AAT is likely the superior value option right now.