Back to top

Image: Bigstock

GLPI or OHI: 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 Gaming and Leisure Properties (GLPI - Free Report) or Omega Healthcare Investors (OHI - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Gaming and Leisure Properties is sporting a Zacks Rank of #2 (Buy), while Omega Healthcare Investors has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GLPI likely has seen a stronger improvement to its earnings outlook than OHI has recently. 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.

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.

GLPI currently has a forward P/E ratio of 10.74, while OHI has a forward P/E of 14.95. We also note that GLPI has a PEG ratio of 1.81. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OHI currently has a PEG ratio of 1.97.

Another notable valuation metric for GLPI is its P/B ratio of 2.39. 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, OHI has a P/B of 2.6.

These metrics, and several others, help GLPI earn a Value grade of B, while OHI has been given a Value grade of C.

GLPI 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 GLPI is likely the superior value option right now.

Published in