Investors with an interest in Hotels and Motels stocks have likely encountered both H World Group (HTHT) and Wyndham Hotels (WH). 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
H World Group and Wyndham Hotels are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that HTHT likely has seen a stronger improvement to its earnings outlook than WH 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
HTHT currently has a forward P/E ratio of 16.36, while WH has a forward P/E of 17.59. We also note that HTHT has a PEG ratio of 1.12. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. WH currently has a PEG ratio of 2.29.
Another notable valuation metric for HTHT is its P/B ratio of 8.29. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WH has a P/B of 14.3.
Based on these metrics and many more, HTHT holds a Value grade of B, while WH has a Value grade of D.
HTHT stands above WH thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HTHT is the superior value option right now.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
H World Group Limited Sponsored ADR (HTHT): Free Stock Analysis Report
Wyndham Hotels & Resorts (WH): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).