CIO vs. OHI: Which Stock Is the Better Value Option?
Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either City Office REIT (CIO) or 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.
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.
Both City Office REIT and Omega Healthcare Investors have a Zacks Rank of #2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.
CIO currently has a forward P/E ratio of 4.86, while OHI has a forward P/E of 12.14. We also note that CIO has a PEG ratio of 0.81. 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. OHI currently has a PEG ratio of 2.08.
Another notable valuation metric for CIO is its P/B ratio of 0.36. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, OHI has a P/B of 2.15.
These metrics, and several others, help CIO earn a Value grade of A, while OHI has been given a Value grade of C.
Both CIO and OHI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CIO is the superior value option right now.
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City Office REIT, Inc. (CIO) : Free Stock Analysis Report
Omega Healthcare Investors, Inc. (OHI) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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