Investors interested in Real Estate - Operations stocks are likely familiar with Legacy Housing (LEGH) and Invitation Home (INVH). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Legacy Housing and Invitation Home 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
LEGH currently has a forward P/E ratio of 11.63, while INVH has a forward P/E of 22.25. We also note that LEGH has a PEG ratio of 0.58. 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. INVH currently has a PEG ratio of 2.78.
Another notable valuation metric for LEGH is its P/B ratio of 1.56. 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, INVH has a P/B of 1.78.
These are just a few of the metrics contributing to LEGH's Value grade of A and INVH's Value grade of D.
Both LEGH and INVH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LEGH is the superior value option right now.
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Legacy Housing Corporation (LEGH) : Free Stock Analysis Report
Invitation Home Inc. (INVH) : Free Stock Analysis Report
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