PMT vs. INVH: Which Stock Is the Better Value Option?
Investors with an interest in Real Estate - Operations stocks have likely encountered both PennyMac Mortgage (PMT) 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, PennyMac Mortgage is sporting a Zacks Rank of #1 (Strong Buy), while Invitation Home has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that PMT likely has seen a stronger improvement to its earnings outlook than INVH has recently. But this is just one piece of the puzzle 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
PMT currently has a forward P/E ratio of 11.49, while INVH has a forward P/E of 18.30. We also note that PMT has a PEG ratio of 2.30. 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 3.53.
Another notable valuation metric for PMT is its P/B ratio of 0.98. 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 1.37.
These metrics, and several others, help PMT earn a Value grade of A, while INVH has been given a Value grade of F.
PMT sticks out from INVH in both our Zacks Rank and Style Scores models, so value investors will likely feel that PMT is the better option right now.
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PennyMac Mortgage Investment Trust (PMT) : Free Stock Analysis Report
Invitation Home Inc. (INVH) : Free Stock Analysis Report
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