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DEI vs. CUBE: Which Stock Is the Better Value Option?

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Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Douglas Emmett (DEI - Free Report) and CubeSmart (CUBE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both Douglas Emmett and CubeSmart are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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.

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.

DEI currently has a forward P/E ratio of 10.28, while CUBE has a forward P/E of 18.24. We also note that DEI has a PEG ratio of 1.96. 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. CUBE currently has a PEG ratio of 2.32.

Another notable valuation metric for DEI is its P/B ratio of 0.88. 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, CUBE has a P/B of 3.60.

These are just a few of the metrics contributing to DEI's Value grade of B and CUBE's Value grade of D.

Both DEI and CUBE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DEI is the superior value option right now.


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