Yahoo Finance SLG or DLR: Which Is the Better Value Stock Right Now?
Investors interested in REIT and Equity Trust - Other stocks are likely familiar with SL Green (SLG) and Digital Realty Trust (DLR). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Right now, SL Green is sporting a Zacks Rank of #2 (Buy), while Digital Realty Trust has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SLG likely has seen a stronger improvement to its earnings outlook than DLR has recently. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SLG currently has a forward P/E ratio of 8.08, while DLR has a forward P/E of 23.31. We also note that SLG has a PEG ratio of 3.01. 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. DLR currently has a PEG ratio of 3.54.
Another notable valuation metric for SLG is its P/B ratio of 0.78. 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, DLR has a P/B of 2.41.
Based on these metrics and many more, SLG holds a Value grade of B, while DLR has a Value grade of D.
SLG has seen stronger estimate revision activity and sports more attractive valuation metrics than DLR, so it seems like value investors will conclude that SLG is the superior option right now.
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SL Green Realty Corporation (SLG) : Free Stock Analysis Report
Digital Realty Trust, Inc. (DLR) : Free Stock Analysis Report
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