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Are Investors Undervaluing Brandywine Realty Trust (BDN) Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Brandywine Realty Trust (BDN - Free Report) is a stock many investors are watching right now. BDN is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

We also note that BDN holds a PEG ratio of 1.44. 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. BDN's PEG compares to its industry's average PEG of 2.32. Within the past year, BDN's PEG has been as high as 2.28 and as low as 1.15, with a median of 1.53.

Another valuation metric that we should highlight is BDN's P/B ratio of 0.58. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.71. Over the past year, BDN's P/B has been as high as 0.74 and as low as 0.37, with a median of 0.51.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. BDN has a P/S ratio of 1.73. This compares to its industry's average P/S of 4.04.

Finally, our model also underscores that BDN has a P/CF ratio of 4.74. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 14.71. Within the past 12 months, BDN's P/CF has been as high as 5.18 and as low as 2.60, with a median of 3.78.

Summit Hotel Properties (INN - Free Report) may be another strong REIT and Equity Trust - Other stock to add to your shortlist. INN is a # 2 (Buy) stock with a Value grade of A.

Shares of Summit Hotel Properties are currently trading at a forward earnings multiple of 7.32 and a PEG ratio of 0.22 compared to its industry's P/E and PEG ratios of 15.12 and 2.32, respectively.

INN's price-to-earnings ratio has been as high as 9.71 and as low as 5.77, with a median of 7.21, while its PEG ratio has been as high as 1.96 and as low as 0.12, with a median of 0.75, all within the past year.

Additionally, Summit Hotel Properties has a P/B ratio of 0.52 while its industry's price-to-book ratio sits at 1.71. For INN, this valuation metric has been as high as 0.66, as low as 0.41, with a median of 0.50 over the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Brandywine Realty Trust and Summit Hotel Properties are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, BDN and INN feels like a great value stock at the moment.


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