CBRE vs. BEKE: Which Stock Is the Better Value Option?
Investors interested in stocks from the Real Estate - Operations sector have probably already heard of CBRE Group (CBRE) and KE Holdings Inc. Sponsored ADR (BEKE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, CBRE Group has a Zacks Rank of #2 (Buy), while KE Holdings Inc. Sponsored ADR has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CBRE has an improving earnings outlook. 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.
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.
CBRE currently has a forward P/E ratio of 22.44, while BEKE has a forward P/E of 102.01. We also note that CBRE has a PEG ratio of 2.04. 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. BEKE currently has a PEG ratio of 3.43.
Another notable valuation metric for CBRE is its P/B ratio of 3.17. 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, BEKE has a P/B of 7.39.
These are just a few of the metrics contributing to CBRE's Value grade of B and BEKE's Value grade of F.
CBRE has seen stronger estimate revision activity and sports more attractive valuation metrics than BEKE, so it seems like value investors will conclude that CBRE is the superior option right now.
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