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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 Omega Healthcare Investors (OHI). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Community Healthcare Trust has a Zacks Rank of #2 (Buy), while Omega Healthcare Investors has a Zacks Rank of #3 (Hold) right now. 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 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.
CHCT currently has a forward P/E ratio of 8.28, while OHI has a forward P/E of 13.38. We also note that CHCT has a PEG ratio of 1.04. 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. OHI currently has a PEG ratio of 1.12.
Another notable valuation metric for CHCT is its P/B ratio of 1.08. 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, OHI has a P/B of 2.34.
Based on these metrics and many more, CHCT holds a Value grade of A, while OHI has a Value grade of C.
CHCT sticks out from OHI 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
Omega Healthcare Investors, Inc. (OHI) : Free Stock Analysis Report