APLE vs. EXR: Which Stock Is the Better Value Option?

Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Apple Hospitality REIT (APLE) or Extra Space Storage (EXR). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Apple Hospitality REIT has a Zacks Rank of #2 (Buy), while Extra Space Storage has a Zacks Rank of #3 (Hold) right now. This means that APLE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

APLE currently has a forward P/E ratio of 10.94, while EXR has a forward P/E of 17.17. We also note that APLE has a PEG ratio of 3.43. 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. EXR currently has a PEG ratio of 4.24.

Another notable valuation metric for APLE is its P/B ratio of 1.37. 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, EXR has a P/B of 2.13.

These metrics, and several others, help APLE earn a Value grade of B, while EXR has been given a Value grade of D.

APLE sticks out from EXR in both our Zacks Rank and Style Scores models, so value investors will likely feel that APLE is the better option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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