Back to top

CXW vs. HST: Which Stock Should Value Investors Buy Now?

Read MoreHide Full Article

Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either CCA (CXW - Free Report) or Host Hotels (HST - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

CCA and Host Hotels are both sporting 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 these stocks have improving earnings outlooks. But this is just one piece of the puzzle 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

CXW currently has a forward P/E ratio of 9.35, while HST has a forward P/E of 12.56. We also note that CXW has a PEG ratio of 1.56. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. HST currently has a PEG ratio of 2.51.

Another notable valuation metric for CXW is its P/B ratio of 1.74. 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, HST has a P/B of 2.24.

These are just a few of the metrics contributing to CXW's Value grade of A and HST's Value grade of C.

Both CXW and HST are impressive stocks with improving earnings outlooks. But considering the above metrics, value investors will likely feel that CXW is the better option right now.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Corrections Corp. of America (CXW) - free report >>

Host Hotels & Resorts, Inc. (HST) - free report >>

More from Zacks Tale of the Tape

You May Like