Yahoo Finance GNL vs. SHO: Which Stock Should Value Investors Buy 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 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.
Currently, Global Net Lease has a Zacks Rank of #2 (Buy), while Sunstone Hotel Investors has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GNL likely has seen a stronger improvement to its earnings outlook than SHO has recently. However, value investors will care about much more than just this.
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.
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.
GNL currently has a forward P/E ratio of 6.64, while SHO has a forward P/E of 11.12. We also note that GNL has a PEG ratio of 1.11. 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 2.53.
Another notable valuation metric for GNL is its P/B ratio of 0.74. 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, SHO has a P/B of 1.18.
These metrics, and several others, help GNL earn a Value grade of A, 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
