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PGRE vs. OHI: Which Stock Is the Better Value Option?

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Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Paramount Group (PGRE - Free Report) and Omega Healthcare Investors (OHI - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Paramount Group has a Zacks Rank of #2 (Buy), while Omega Healthcare Investors has a Zacks Rank of #3 (Hold) right now. This means that PGRE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

PGRE currently has a forward P/E ratio of 6.13, while OHI has a forward P/E of 12.07. We also note that PGRE has a PEG ratio of 0.23. 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. OHI currently has a PEG ratio of 1.17.

Another notable valuation metric for PGRE is its P/B ratio of 0.25. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, OHI has a P/B of 2.24.

Based on these metrics and many more, PGRE holds a Value grade of A, while OHI has a Value grade of D.

PGRE stands above OHI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PGRE is the superior value option right now.


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Omega Healthcare Investors, Inc. (OHI) - free report >>

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