Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Outfront Media (OUT) and American Tower (AMT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Outfront Media is sporting a Zacks Rank of #2 (Buy), while American Tower has a Zacks Rank of #3 (Hold). This means that OUT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
OUT currently has a forward P/E ratio of 10.97, while AMT has a forward P/E of 24.67. We also note that OUT has a PEG ratio of 1.50. 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. AMT currently has a PEG ratio of 1.51.
Another notable valuation metric for OUT is its P/B ratio of 3.01. 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, AMT has a P/B of 14.33.
Based on these metrics and many more, OUT holds a Value grade of B, while AMT has a Value grade of D.
OUT sticks out from AMT in both our Zacks Rank and Style Scores models, so value investors will likely feel that OUT is the better option right now.
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OUTFRONT Media Inc. (OUT) : Free Stock Analysis Report
American Tower Corporation (REIT) (AMT) : Free Stock Analysis Report
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