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

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Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Whitestone (WSR - Free Report) or CubeSmart (CUBE - 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.

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.

Whitestone and CubeSmart are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that WSR is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

WSR currently has a forward P/E ratio of 10.76, while CUBE has a forward P/E of 17.17. We also note that WSR has a PEG ratio of 1.34. 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 2.08.

Another notable valuation metric for WSR is its P/B ratio of 1.08. 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 3.69.

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

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


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