Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Ashford Hospitality Trust (AHT) and Ventas (VTR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Ashford Hospitality Trust has a Zacks Rank of #2 (Buy), while Ventas has a Zacks Rank of #3 (Hold). This means that AHT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
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 5.75, while VTR has a forward P/E of 14.40. We also note that AHT has a PEG ratio of 1.15. 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. VTR currently has a PEG ratio of 3.82.
Another notable valuation metric for AHT is its P/B ratio of 1.35. 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 1.89.
These metrics, and several others, help AHT earn a Value grade of A, while VTR has been given a Value grade of D.
AHT 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 AHT is likely the superior value option right now.
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Ashford Hospitality Trust Inc (AHT) : Free Stock Analysis Report
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