Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Summit Hotel Properties (INN) and National Health Investors (NHI). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Summit Hotel Properties has a Zacks Rank of #2 (Buy), while National Health Investors 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 INN 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 are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
INN currently has a forward P/E ratio of 6.19, while NHI has a forward P/E of 15.80. We also note that INN has a PEG ratio of 1.32. 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. NHI currently has a PEG ratio of 4.67.
Another notable valuation metric for INN is its P/B ratio of 0.45. 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, NHI has a P/B of 2.42.
Based on these metrics and many more, INN holds a Value grade of A, while NHI has a Value grade of D.
INN stands above NHI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that INN is the superior value option right now.
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Summit Hotel Properties, Inc. (INN) : Free Stock Analysis Report
National Health Investors, Inc. (NHI) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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