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PEB vs. GTY: Which Stock Should Value Investors Buy Now?

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Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Pebblebrook Hotel (PEB - Free Report) and Getty Realty (GTY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Pebblebrook Hotel has a Zacks Rank of #1 (Strong Buy), while Getty Realty has a Zacks Rank of #2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PEB is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

PEB currently has a forward P/E ratio of 11.04, while GTY has a forward P/E of 13.10. We also note that PEB has a PEG ratio of 1.53. 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. GTY currently has a PEG ratio of 2.61.

Another notable valuation metric for PEB is its P/B ratio of 0.83. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, GTY has a P/B of 1.86.

Based on these metrics and many more, PEB holds a Value grade of A, while GTY has a Value grade of C.

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

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