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Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Community Healthcare Trust (CHCT) 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.
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.
Currently, Community Healthcare Trust has a Zacks Rank of #2 (Buy), while National Health Investors has a Zacks Rank of #4 (Sell). This means that CHCT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
CHCT currently has a forward P/E ratio of 8.25, while NHI has a forward P/E of 16.99. We also note that CHCT has a PEG ratio of 1.03. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NHI currently has a PEG ratio of 5.02.
Another notable valuation metric for CHCT is its P/B ratio of 1.07. 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, NHI has a P/B of 2.65.
These metrics, and several others, help CHCT earn a Value grade of A, while NHI has been given a Value grade of F.
CHCT sticks out from NHI in both our Zacks Rank and Style Scores models, so value investors will likely feel that CHCT is the better option right now.
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Community Healthcare Trust Incorporated (CHCT) : Free Stock Analysis Report
National Health Investors, Inc. (NHI) : Free Stock Analysis Report