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CXW or HIW: 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 CCA or Highwoods Properties (HIW - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

CCA and Highwoods Properties are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CXW has an improving earnings outlook. However, value investors will care about much more than just this.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CXW currently has a forward P/E ratio of 10.56, while HIW has a forward P/E of 14.90. We also note that CXW has a PEG ratio of 1.76. 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. HIW currently has a PEG ratio of 5.10.

Another notable valuation metric for CXW is its P/B ratio of 1.98. 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, HIW has a P/B of 2.38.

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

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


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