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

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Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Outfront Media (OUT - Free Report) and 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Outfront Media has a Zacks Rank of #2 (Buy), while CubeSmart has a Zacks Rank of #3 (Hold). This means that OUT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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.

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.

OUT currently has a forward P/E ratio of 7.97, while CUBE has a forward P/E of 16.72. We also note that OUT has a PEG ratio of 0.80. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CUBE currently has a PEG ratio of 3.90.

Another notable valuation metric for OUT is its P/B ratio of 2.20. 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 metrics, and several others, help OUT earn a Value grade of B, while CUBE has been given a Value grade of D.

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


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