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RTL vs. CUBE: Which Stock Is the Better Value Option?

Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either The Necessity Retail (RTL) or CubeSmart (CUBE). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, The Necessity Retail has a Zacks Rank of #2 (Buy), while CubeSmart 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 RTL 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 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.

RTL currently has a forward P/E ratio of 5.63, while CUBE has a forward P/E of 15.32. We also note that RTL has a PEG ratio of 0.94. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CUBE currently has a PEG ratio of 1.95.

Another notable valuation metric for RTL is its P/B ratio of 0.50. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CUBE has a P/B of 3.02.

These metrics, and several others, help RTL earn a Value grade of A, while CUBE has been given a Value grade of D.

RTL sticks out from CUBE in both our Zacks Rank and Style Scores models, so value investors will likely feel that RTL is the better option right now.


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The Necessity Retail REIT, Inc. (RTL) : Free Stock Analysis Report
 
CubeSmart (CUBE) : Free Stock Analysis Report
 
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