Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Ashford Hospitality Trust (AHT) or Lexington Realty (LXP). But which of these two stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Ashford Hospitality Trust and Lexington Realty are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that AHT likely has seen a stronger improvement to its earnings outlook than LXP has recently. 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 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.
AHT currently has a forward P/E ratio of 3.85, while LXP has a forward P/E of 11.64. We also note that AHT has a PEG ratio of 0.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. LXP currently has a PEG ratio of 10.91.
Another notable valuation metric for AHT is its P/B ratio of 1.06. 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, LXP has a P/B of 1.71.
Based on these metrics and many more, AHT holds a Value grade of A, while LXP has a Value grade of C.
AHT has seen stronger estimate revision activity and sports more attractive valuation metrics than LXP, so it seems like value investors will conclude that AHT is the superior option right now.
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Ashford Hospitality Trust Inc (AHT) : Free Stock Analysis Report
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