Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Summit Hotel Properties (INN) and Omega Healthcare Investors (OHI). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both Summit Hotel Properties and Omega Healthcare Investors have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

INN currently has a forward P/E ratio of 4.59, while OHI has a forward P/E of 12.66. We also note that INN has a PEG ratio of 0.98. 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. OHI currently has a PEG ratio of 2.11.

Another notable valuation metric for INN is its P/B ratio of 0.33. 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, OHI has a P/B of 2.17.

These metrics, and several others, help INN earn a Value grade of A, while OHI has been given a Value grade of C.

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

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Summit Hotel Properties, Inc. (INN):Free Stock Analysis Report

Omega Healthcare Investors, Inc. (OHI):Free Stock Analysis Report

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

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