Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Hersha Hospitality (HT) or InfraREIT (HIFR). But which of these two stocks presents investors with the better value opportunity right now? 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Hersha Hospitality has a Zacks Rank of #2 (Buy), while InfraREIT has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HT is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
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.
HT currently has a forward P/E ratio of 10.37, while HIFR has a forward P/E of 16.34. We also note that HT has a PEG ratio of 1.89. 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. HIFR currently has a PEG ratio of 3.27.
Another notable valuation metric for HT is its P/B ratio of 0.92. 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, HIFR has a P/B of 1.01.
These are just a few of the metrics contributing to HT's Value grade of A and HIFR's Value grade of C.
HT sticks out from HIFR in both our Zacks Rank and Style Scores models, so value investors will likely feel that HT is the better option right now.
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Hersha Hospitality Trust (HT) : Free Stock Analysis Report
InfraREIT, Inc. (HIFR) : Free Stock Analysis Report
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