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Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Global Medical REIT (GMRE) or CubeSmart (CUBE). 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 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.
Right now, Global Medical REIT is sporting a Zacks Rank of #2 (Buy), while CubeSmart 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 GMRE is likely seeing its earnings outlook improve to a greater extent. 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.
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.
GMRE currently has a forward P/E ratio of 10.07, while CUBE has a forward P/E of 18.86. We also note that GMRE has a PEG ratio of 1.26. 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. CUBE currently has a PEG ratio of 9.11.
Another notable valuation metric for GMRE is its P/B ratio of 1.20. 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, CUBE has a P/B of 4.02.
These metrics, and several others, help GMRE earn a Value grade of B, while CUBE has been given a Value grade of F.
GMRE stands above CUBE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GMRE is the superior value option right now.
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Global Medical REIT Inc. (GMRE) : Free Stock Analysis Report