PGRE or OHI: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Paramount Group (PGRE) or Omega Healthcare Investors (OHI). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Right now, Paramount Group is sporting a Zacks Rank of #2 (Buy), while Omega Healthcare Investors has a Zacks Rank of #4 (Sell). This means that PGRE'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 also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
PGRE currently has a forward P/E ratio of 6.37, while OHI has a forward P/E of 11.07. We also note that PGRE has a PEG ratio of 0.24. 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. OHI currently has a PEG ratio of 9.38.
Another notable valuation metric for PGRE is its P/B ratio of 0.25. 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. For comparison, OHI has a P/B of 2.
These metrics, and several others, help PGRE earn a Value grade of A, while OHI has been given a Value grade of F.
PGRE 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 PGRE 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
Paramount Group, Inc. (PGRE) : Free Stock Analysis Report
Omega Healthcare Investors, Inc. (OHI) : Free Stock Analysis Report
