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CLI or WELL: 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 Mack-Cali Realty or Welltower (WELL - 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.

Right now, Mack-Cali Realty is sporting a Zacks Rank of #2 (Buy), while Welltower has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CLI has an improving earnings outlook. But this is only part of the picture 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.

CLI currently has a forward P/E ratio of 11.61, while WELL has a forward P/E of 14.38. We also note that CLI has a PEG ratio of 2.63. 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. WELL currently has a PEG ratio of 6.21.

Another notable valuation metric for CLI is its P/B ratio of 0.81. 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, WELL has a P/B of 1.20.

Based on these metrics and many more, CLI holds a Value grade of B, while WELL has a Value grade of C.

CLI 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 CLI is likely the superior value option right now.


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