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Investors looking for stocks in the Real Estate - Operations sector might want to consider either Jones Lang LaSalle (JLL) or Kennedy-Wilson (KW). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, both Jones Lang LaSalle and Kennedy-Wilson are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
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.
JLL currently has a forward P/E ratio of 8.81, while KW has a forward P/E of 9.97. We also note that JLL has a PEG ratio of 0.98. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. KW currently has a PEG ratio of 4.55.
Another notable valuation metric for JLL is its P/B ratio of 1.36. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, KW has a P/B of 1.78.
These are just a few of the metrics contributing to JLL's Value grade of B and KW's Value grade of D.
Both JLL and KW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that JLL is the superior value option right now.
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Jones Lang LaSalle Incorporated (JLL) : Free Stock Analysis Report
KennedyWilson Holdings Inc. (KW) : Free Stock Analysis Report
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