Investors with an interest in Real Estate - Operations stocks have likely encountered both Newmark Group (NMRK - Free Report) and RE/MAX (RMAX - 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.
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 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, Newmark Group has a Zacks Rank of #2 (Buy), while RE/MAX has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NMRK is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
NMRK currently has a forward P/E ratio of 10.34, while RMAX has a forward P/E of 24.17. We also note that NMRK has a PEG ratio of 0.69. 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. RMAX currently has a PEG ratio of 3.45.
Another notable valuation metric for NMRK is its P/B ratio of 4.52. 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, RMAX has a P/B of 19.23.
Based on these metrics and many more, NMRK holds a Value grade of A, while RMAX has a Value grade of D.
NMRK 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 NMRK is likely the superior value option right now.