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CBRE vs. BEKE: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Real Estate - Operations sector have probably already heard of CBRE Group (CBRE - Free Report) and KE Holdings Inc. Sponsored ADR (BEKE - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

CBRE Group has a Zacks Rank of #2 (Buy), while KE Holdings Inc. Sponsored ADR has a Zacks Rank of #3 (Hold) right now. This means that CBRE'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 try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

CBRE currently has a forward P/E ratio of 21.81, while BEKE has a forward P/E of 65.75. We also note that CBRE has a PEG ratio of 1.98. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BEKE currently has a PEG ratio of 2.21.

Another notable valuation metric for CBRE is its P/B ratio of 3.80. 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, BEKE has a P/B of 6.58.

These metrics, and several others, help CBRE earn a Value grade of B, while BEKE has been given a Value grade of D.

CBRE 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 CBRE is likely the superior value option right now.


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