LEGH or INVH: Which Is the Better Value Stock Right Now?
Investors interested in Real Estate - Operations stocks are likely familiar with Legacy Housing (LEGH) and Invitation Home (INVH). 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.
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 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.
Both Legacy Housing and Invitation Home have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
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 11.17, while INVH has a forward P/E of 21.12. We also note that LEGH has a PEG ratio of 0.56. 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. INVH currently has a PEG ratio of 2.64.
Another notable valuation metric for LEGH is its P/B ratio of 1.50. 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, INVH has a P/B of 1.69.
Based on these metrics and many more, LEGH holds a Value grade of A, while INVH has a 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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