Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Sabra Healthcare (SBRA) or CubeSmart (CUBE). 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.
Sabra Healthcare has a Zacks Rank of #2 (Buy), while CubeSmart has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that SBRA likely has seen a stronger improvement to its earnings outlook than CUBE has recently. But this is only part of the picture 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.
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.
SBRA currently has a forward P/E ratio of 11.91, while CUBE has a forward P/E of 15.61. We also note that SBRA has a PEG ratio of 1.35. 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. CUBE currently has a PEG ratio of 6.95.
Another notable valuation metric for SBRA is its P/B ratio of 1.67. 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 3.42.
These are just a few of the metrics contributing to SBRA's Value grade of B and CUBE's Value grade of C.
SBRA is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SBRA is likely the superior value option right now.
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Sabra Healthcare REIT, Inc. (SBRA): Free Stock Analysis Report
CubeSmart (CUBE): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).