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OUT vs. PSA: Which Stock Should Value Investors Buy Now?

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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 Public Storage (PSA - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, Outfront Media is sporting a Zacks Rank of #2 (Buy), while Public Storage 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 also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

OUT currently has a forward P/E ratio of 8.78, while PSA has a forward P/E of 16.45. We also note that OUT has a PEG ratio of 0.88. 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. PSA currently has a PEG ratio of 3.65.

Another notable valuation metric for OUT is its P/B ratio of 3.97. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PSA has a P/B of 8.54.

These metrics, and several others, help OUT earn a Value grade of B, while PSA has been given a Value grade of D.

OUT stands above PSA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that OUT is the superior value option right now.


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