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OUT vs. PSA: 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 Outfront Media (OUT - Free Report) or Public Storage (PSA - 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.

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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Outfront Media has a Zacks Rank of #2 (Buy), while Public Storage has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that OUT is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

OUT currently has a forward P/E ratio of 9.36, while PSA has a forward P/E of 16.40. We also note that OUT has a PEG ratio of 0.94. 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. PSA currently has a PEG ratio of 3.64.

Another notable valuation metric for OUT is its P/B ratio of 4.24. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, PSA has a P/B of 8.46.

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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