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NLY vs. HASI: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the REIT and Equity Trust sector might want to consider either Annaly Capital Management (NLY - Free Report) or Hannon Armstrong (HASI - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Annaly Capital Management has a Zacks Rank of #2 (Buy), while Hannon Armstrong has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NLY 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.

NLY currently has a forward P/E ratio of 6.30, while HASI has a forward P/E of 18.07. We also note that NLY has a PEG ratio of 1.26. 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. HASI currently has a PEG ratio of 1.75.

Another notable valuation metric for NLY is its P/B ratio of 1.01. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, HASI has a P/B of 1.98.

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

NLY has seen stronger estimate revision activity and sports more attractive valuation metrics than HASI, so it seems like value investors will conclude that NLY is the superior option right now.


In-Depth Zacks Research for the Tickers Above


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Annaly Capital Management Inc (NLY) - free report >>

Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) - free report >>

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