Are Investors Undervaluing RLJ Lodging Trust (RLJ) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is RLJ Lodging Trust (RLJ). RLJ is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 6.97. This compares to its industry's average Forward P/E of 14.91. Over the past year, RLJ's Forward P/E has been as high as 7.20 and as low as 5.46, with a median of 6.19.
We also note that RLJ holds a PEG ratio of 0.82. 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. RLJ's industry currently sports an average PEG of 2.23. Over the past 52 weeks, RLJ's PEG has been as high as 2.45 and as low as 0.74, with a median of 1.53.
Investors should also recognize that RLJ has a P/B ratio of 0.91. 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. This stock's P/B looks attractive against its industry's average P/B of 1.69. Within the past 52 weeks, RLJ's P/B has been as high as 0.96 and as low as 0.71, with a median of 0.81.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. RLJ has a P/S ratio of 1.39. This compares to its industry's average P/S of 3.86.
Finally, our model also underscores that RLJ has a P/CF ratio of 6.35. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. RLJ's current P/CF looks attractive when compared to its industry's average P/CF of 14.53. RLJ's P/CF has been as high as 7.58 and as low as 4.90, with a median of 5.78, all within the past year.
If you're looking for another solid REIT and Equity Trust - Other value stock, take a look at Xenia Hotels & Resorts (XHR). XHR is a # 2 (Buy) stock with a Value score of A.
Xenia Hotels & Resorts also has a P/B ratio of 1.03 compared to its industry's price-to-book ratio of 1.69. Over the past year, its P/B ratio has been as high as 1.16, as low as 0.85, with a median of 0.98.
These are just a handful of the figures considered in RLJ Lodging Trust and Xenia Hotels & Resorts's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that RLJ and XHR is an impressive value stock right now.
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RLJ Lodging Trust (RLJ) : Free Stock Analysis Report
Xenia Hotels & Resorts, Inc. (XHR) : Free Stock Analysis Report
