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HIW vs. LSI: Which Stock Is the Better Value Option?

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·2-min read
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  • HIW
  • LSI

Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Highwoods Properties (HIW) and Life Storage (LSI). 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Highwoods Properties and Life Storage are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.

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.

HIW currently has a forward P/E ratio of 12.35, while LSI has a forward P/E of 27.02. We also note that HIW has a PEG ratio of 3.36. 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. LSI currently has a PEG ratio of 7.44.

Another notable valuation metric for HIW is its P/B ratio of 2.02. 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, LSI has a P/B of 3.42.

These are just a few of the metrics contributing to HIW's Value grade of B and LSI's Value grade of D.

Both HIW and LSI are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HIW is the superior value option right now.


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Highwoods Properties, Inc. (HIW) : Free Stock Analysis Report
 
Life Storage, Inc. (LSI) : Free Stock Analysis Report
 
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