Back to top

Image: Bigstock

DEI or NNN: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Douglas Emmett (DEI - Free Report) or NNN REIT (NNN - 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 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, Douglas Emmett has a Zacks Rank of #2 (Buy), while NNN REIT has a Zacks Rank of #4 (Sell). This means that DEI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.

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.

DEI currently has a forward P/E ratio of 7.41, while NNN has a forward P/E of 12.74. We also note that DEI has a PEG ratio of 4.69. 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. NNN currently has a PEG ratio of 5.94.

Another notable valuation metric for DEI is its P/B ratio of 0.5. 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, NNN has a P/B of 1.94.

Based on these metrics and many more, DEI holds a Value grade of A, while NNN has a Value grade of D.

DEI sticks out from NNN in both our Zacks Rank and Style Scores models, so value investors will likely feel that DEI is the better option right now.

Zacks' 7 Best Strong Buy Stocks (New Research Report)

Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.

Click Here, It's Really Free

Published in