CIO vs. ILPT: Which Stock Should Value Investors Buy Now?
Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both City Office REIT (CIO) and Industrial Logistics Properties Trust (ILPT). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, City Office REIT has a Zacks Rank of #2 (Buy), while Industrial Logistics Properties Trust has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CIO likely has seen a stronger improvement to its earnings outlook than ILPT 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.
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.
CIO currently has a forward P/E ratio of 9.50, while ILPT has a forward P/E of 14.37. We also note that CIO has a PEG ratio of 1.36. 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. ILPT currently has a PEG ratio of 6.36.
Another notable valuation metric for CIO is its P/B ratio of 1.55. 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, ILPT has a P/B of 1.76.
Based on these metrics and many more, CIO holds a Value grade of A, while ILPT has a Value grade of C.
CIO 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 CIO is likely the superior value option right now.
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City Office REIT, Inc. (CIO) : Free Stock Analysis Report
Industrial Logistics Properties Trust (ILPT) : Free Stock Analysis Report
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