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Should Value Investors Buy Braemar Hotels & Resorts (BHR) Stock?

Zacks Equity Research
DOX vs. NOW: Which Stock Is the Better Value Option?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Braemar Hotels & Resorts (BHR) is a stock many investors are watching right now. BHR is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.97. This compares to its industry's average Forward P/E of 15.51. Over the last 12 months, BHR's Forward P/E has been as high as 7.85 and as low as 5.34, with a median of 6.59.

Investors should also note that BHR holds a PEG ratio of 1.16. 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. BHR's industry currently sports an average PEG of 2.71. Over the last 12 months, BHR's PEG has been as high as 1.18 and as low as 0.91, with a median of 1.04.

We should also highlight that BHR has a P/B ratio of 0.89. 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. This stock's P/B looks attractive against its industry's average P/B of 2.33. Over the past 12 months, BHR's P/B has been as high as 1.02 and as low as 0.73, with a median of 0.90.

Value investors will likely look at more than just these metrics, but the above data helps show that Braemar Hotels & Resorts is likely undervalued currently. And when considering the strength of its earnings outlook, BHR sticks out at as one of the market's strongest value stocks.


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