VAC vs. OLCLY: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Hotels and Motels sector might want to consider either Marriott Vacations Worldwide (VAC) or ORIENTAL LAND (OLCLY). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Marriott Vacations Worldwide has a Zacks Rank of #2 (Buy), while ORIENTAL LAND has a Zacks Rank of #4 (Sell) right now. This means that VAC'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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
VAC currently has a forward P/E ratio of 12.43, while OLCLY has a forward P/E of 38.06. We also note that VAC has a PEG ratio of 1.24. 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. OLCLY currently has a PEG ratio of 2.93.
Another notable valuation metric for VAC is its P/B ratio of 2.22. 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, OLCLY has a P/B of 5.39.
These are just a few of the metrics contributing to VAC's Value grade of B and OLCLY's Value grade of F.
VAC 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 VAC is likely the superior value option right now.
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Marriot Vacations Worldwide Corporation (VAC) : Free Stock Analysis Report
ORIENTAL LAND (OLCLY) : Free Stock Analysis Report
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