JLL or RMAX: Which Is the Better Value Stock Right Now?
Investors with an interest in Real Estate - Operations stocks have likely encountered both Jones Lang LaSalle (JLL) and RE/MAX (RMAX). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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, Jones Lang LaSalle has a Zacks Rank of #1 (Strong Buy), while RE/MAX has a Zacks Rank of #3 (Hold). This means that JLL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
JLL currently has a forward P/E ratio of 13.37, while RMAX has a forward P/E of 17.55. We also note that JLL has a PEG ratio of 1.49. 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. RMAX currently has a PEG ratio of 2.51.
Another notable valuation metric for JLL is its P/B ratio of 1.90. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, RMAX has a P/B of 8.84.
Based on these metrics and many more, JLL holds a Value grade of A, while RMAX has a Value grade of C.
JLL 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 JLL is likely the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Jones Lang LaSalle Incorporated (JLL) : Free Stock Analysis Report
RE/MAX Holdings, Inc. (RMAX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
