Investors with an interest in Real Estate - Operations stocks have likely encountered both PennyMac Mortgage (PMT) and Landmark Infrastructure Partners (LMRK). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, PennyMac Mortgage has a Zacks Rank of #1 (Strong Buy), while Landmark Infrastructure Partners has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PMT is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
PMT currently has a forward P/E ratio of 10.41, while LMRK has a forward P/E of 29.17. We also note that PMT has a PEG ratio of 2.08. 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. LMRK currently has a PEG ratio of 5.84.
Another notable valuation metric for PMT is its P/B ratio of 1.03. 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, LMRK has a P/B of 1.65.
Based on these metrics and many more, PMT holds a Value grade of B, while LMRK has a Value grade of C.
PMT 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 PMT is likely the superior value option right now.
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PennyMac Mortgage Investment Trust (PMT) : Free Stock Analysis Report
Landmark Infrastructure Partners LP (LMRK) : Free Stock Analysis Report
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