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PEB or OHI: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Pebblebrook Hotel (PEB - Free Report) or 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 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.

Pebblebrook Hotel and Omega Healthcare Investors are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that PEB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

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.

PEB currently has a forward P/E ratio of 8.12, while OHI has a forward P/E of 14.39. We also note that PEB has a PEG ratio of 0.58. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. OHI currently has a PEG ratio of 1.25.

Another notable valuation metric for PEB is its P/B ratio of 0.56. 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, OHI has a P/B of 2.69.

These are just a few of the metrics contributing to PEB's Value grade of A and OHI's Value grade of D.

PEB 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 PEB is likely the superior value option right now.


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Pebblebrook Hotel Trust (PEB) - free report >>

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