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GNL vs. CDP: 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 Global Net Lease (GNL - Free Report) and COPT Defense (CDP - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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, Global Net Lease has a Zacks Rank of #2 (Buy), while COPT Defense has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that GNL likely has seen a stronger improvement to its earnings outlook than CDP has recently. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

GNL currently has a forward P/E ratio of 5.87, while CDP has a forward P/E of 10.27. We also note that GNL has a PEG ratio of 0.98. 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. CDP currently has a PEG ratio of 2.95.

Another notable valuation metric for GNL is its P/B ratio of 0.77. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CDP has a P/B of 1.89.

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

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


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