PK vs. NTST: Which Stock Is the Better Value Option?

Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Park Hotels & Resorts (PK) or NETSTREIT (NTST). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Park Hotels & Resorts has a Zacks Rank of #2 (Buy), while NETSTREIT has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PK is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

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.

PK currently has a forward P/E ratio of 7.76, while NTST has a forward P/E of 15.50. We also note that PK has a PEG ratio of 1.84. 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. NTST currently has a PEG ratio of 2.61.

Another notable valuation metric for PK is its P/B ratio of 1. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NTST has a P/B of 1.37.

Based on these metrics and many more, PK holds a Value grade of A, while NTST has a Value grade of D.

PK stands above NTST thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PK is the superior value option right now.

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

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