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GEO vs. CUBE: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Geo Group (GEO - Free Report) and CubeSmart (CUBE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Geo Group and CubeSmart 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 GEO has an improving earnings outlook. But this is just one piece of the puzzle 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.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

GEO currently has a forward P/E ratio of 2.77, while CUBE has a forward P/E of 17.07. We also note that GEO has a PEG ratio of 0.28. 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. CUBE currently has a PEG ratio of 2.30.

Another notable valuation metric for GEO is its P/B ratio of 0.78. 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, CUBE has a P/B of 3.28.

Based on these metrics and many more, GEO holds a Value grade of A, while CUBE has a Value grade of D.

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


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