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SHO vs. NHI: Which Stock Is the Better Value Option?
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Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Sunstone Hotel Investors (SHO - Free Report) and National Health Investors (NHI - 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.
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.
Right now, Sunstone Hotel Investors is sporting a Zacks Rank of #2 (Buy), while National Health Investors has a Zacks Rank of #4 (Sell). This means that SHO'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 analyze a variety of traditional, tried-and-true metrics to help find companies 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.
SHO currently has a forward P/E ratio of 11.71, while NHI has a forward P/E of 15.26. We also note that SHO has a PEG ratio of 2.49. 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. NHI currently has a PEG ratio of 4.17.
Another notable valuation metric for SHO is its P/B ratio of 1.21. 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, NHI has a P/B of 2.43.
These metrics, and several others, help SHO earn a Value grade of B, while NHI has been given a Value grade of D.
SHO is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SHO is likely the superior value option right now.
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SHO vs. NHI: Which Stock Is the Better Value Option?
Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Sunstone Hotel Investors (SHO - Free Report) and National Health Investors (NHI - 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.
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.
Right now, Sunstone Hotel Investors is sporting a Zacks Rank of #2 (Buy), while National Health Investors has a Zacks Rank of #4 (Sell). This means that SHO'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 analyze a variety of traditional, tried-and-true metrics to help find companies 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.
SHO currently has a forward P/E ratio of 11.71, while NHI has a forward P/E of 15.26. We also note that SHO has a PEG ratio of 2.49. 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. NHI currently has a PEG ratio of 4.17.
Another notable valuation metric for SHO is its P/B ratio of 1.21. 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, NHI has a P/B of 2.43.
These metrics, and several others, help SHO earn a Value grade of B, while NHI has been given a Value grade of D.
SHO is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SHO is likely the superior value option right now.