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ESRT or SHO: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Empire State Realty Trust (ESRT - Free Report) or Sunstone Hotel Investors (SHO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Empire State Realty Trust has a Zacks Rank of #2 (Buy), while Sunstone Hotel Investors has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ESRT has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
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.
ESRT currently has a forward P/E ratio of 10.78, while SHO has a forward P/E of 13.13. We also note that ESRT has a PEG ratio of 3.68. 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. SHO currently has a PEG ratio of 4.38.
Another notable valuation metric for ESRT is its P/B ratio of 0.95. 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, SHO has a P/B of 1.21.
These are just a few of the metrics contributing to ESRT's Value grade of B and SHO's Value grade of C.
ESRT stands above SHO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ESRT is the superior value option right now.
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ESRT or SHO: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Empire State Realty Trust (ESRT - Free Report) or Sunstone Hotel Investors (SHO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Empire State Realty Trust has a Zacks Rank of #2 (Buy), while Sunstone Hotel Investors has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ESRT has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
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.
ESRT currently has a forward P/E ratio of 10.78, while SHO has a forward P/E of 13.13. We also note that ESRT has a PEG ratio of 3.68. 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. SHO currently has a PEG ratio of 4.38.
Another notable valuation metric for ESRT is its P/B ratio of 0.95. 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, SHO has a P/B of 1.21.
These are just a few of the metrics contributing to ESRT's Value grade of B and SHO's Value grade of C.
ESRT stands above SHO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ESRT is the superior value option right now.