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HPP vs. CUBE: Which Stock Is the Better Value Option?

Zacks Equity Research
·2-min read

Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Hudson Pacific Properties (HPP) and CubeSmart (CUBE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Both Hudson Pacific Properties and CubeSmart have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

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.

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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.

HPP currently has a forward P/E ratio of 13.84, while CUBE has a forward P/E of 23.64. We also note that HPP has a PEG ratio of 2.49. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CUBE currently has a PEG ratio of 3.17.

Another notable valuation metric for HPP is its P/B ratio of 1.05. 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, CUBE has a P/B of 5.21.

Based on these metrics and many more, HPP holds a Value grade of B, while CUBE has a Value grade of D.

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


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Hudson Pacific Properties, Inc. (HPP) : Free Stock Analysis Report
 
CubeSmart (CUBE) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research