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 offers value investors a better bang for their buck right now? We'll need to take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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 has a Zacks Rank of #1 (Strong Buy), while Lexington Realty has a Zacks Rank of #2 (Buy) right now. Investors should feel comfortable knowing that AHT likely has seen a stronger improvement to its earnings outlook than LXP has recently. 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.
AHT currently has a forward P/E ratio of 4.35, while LXP has a forward P/E of 11.43. We also note that AHT has a PEG ratio of 0.87. 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 10.09.
Another notable valuation metric for AHT is its P/B ratio of 1.27. 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, LXP has a P/B of 1.69.
These are just a few of the metrics contributing to AHT's Value grade of A and LXP's 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
Lexington Realty Trust (LXP) : Free Stock Analysis Report
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