Back to top

XHR vs. VTR: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Xenia Hotels & Resorts (XHR - Free Report) and Ventas (VTR - 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 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, Xenia Hotels & Resorts has a Zacks Rank of #2 (Buy), while Ventas has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that XHR likely has seen a stronger improvement to its earnings outlook than VTR has recently. But this is just one factor that value investors are interested in.

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.

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.

XHR currently has a forward P/E ratio of 11.45, while VTR has a forward P/E of 14.44. We also note that XHR has a PEG ratio of 1.91. 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. VTR currently has a PEG ratio of 3.83.

Another notable valuation metric for XHR is its P/B ratio of 1.57. 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, VTR has a P/B of 1.91.

Based on these metrics and many more, XHR holds a Value grade of B, while VTR has a Value grade of D.

XHR 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 XHR is likely the superior value option right now.




In-Depth Zacks Research for the Tickers Above


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


Xenia Hotels & Resorts, Inc. (XHR) - free report >>

Ventas, Inc. (VTR) - free report >>

More from Zacks Tale of the Tape

You May Like