Yahoo Finance GNL or SHO: Which Is the Better Value Stock Right Now?
Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Global Net Lease (GNL) and Sunstone Hotel Investors (SHO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Global Net Lease is sporting a Zacks Rank of #2 (Buy), while Sunstone Hotel Investors has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GNL 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 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 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.
GNL currently has a forward P/E ratio of 7.38, while SHO has a forward P/E of 11.08. We also note that GNL has a PEG ratio of 1.23. 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. SHO currently has a PEG ratio of 3.
Another notable valuation metric for GNL is its P/B ratio of 0.80. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, SHO has a P/B of 1.13.
These metrics, and several others, help GNL earn a Value grade of B, while SHO has been given a Value grade of C.
GNL sticks out from SHO in both our Zacks Rank and Style Scores models, so value investors will likely feel that GNL is the better option right now.
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Global Net Lease, Inc. (GNL) : Free Stock Analysis Report
Sunstone Hotel Investors, Inc. (SHO) : Free Stock Analysis Report
