APTS vs. AMH: Which Stock Should Value Investors Buy Now?
APTS vs. AMH: Which Stock Is the Better Value Option?
Investors with an interest in REIT and Equity Trust - Residential stocks have likely encountered both Preferred Apartment Communities (APTS) and American Homes 4 Rent (AMH). 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Preferred Apartment Communities and American Homes 4 Rent are both sporting 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. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
APTS currently has a forward P/E ratio of 12.18, while AMH has a forward P/E of 30.47. We also note that APTS has a PEG ratio of 1.74. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AMH currently has a PEG ratio of 1.96.
Another notable valuation metric for APTS is its P/B ratio of 0.45. 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, AMH has a P/B of 2.11.
Based on these metrics and many more, APTS holds a Value grade of A, while AMH has a Value grade of D.
Both APTS and AMH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that APTS is the superior value option right now.
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Preferred Apartment Communities, Inc. (APTS): Free Stock Analysis Report
American Homes 4 Rent (AMH): Free Stock Analysis Report
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