MPW or OHI: Which Is the Better Value Stock Right Now?
Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Medical Properties (MPW) and 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Medical Properties is sporting a Zacks Rank of #1 (Strong Buy), while Omega Healthcare Investors has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MPW is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
MPW currently has a forward P/E ratio of 5.45, while OHI has a forward P/E of 13.48. We also note that MPW has a PEG ratio of 0.68. 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. OHI currently has a PEG ratio of 1.33.
Another notable valuation metric for MPW is its P/B ratio of 0.48. 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, OHI has a P/B of 2.48.
These metrics, and several others, help MPW earn a Value grade of B, while OHI has been given a Value grade of C.
MPW stands above OHI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MPW is the superior value option right now.
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Medical Properties Trust, Inc. (MPW) : Free Stock Analysis Report
Omega Healthcare Investors, Inc. (OHI) : Free Stock Analysis Report