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NLY or HASI: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2 min read

Investors looking for stocks in the REIT and Equity Trust sector might want to consider either Annaly Capital Management (NLY) or Hannon Armstrong (HASI). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Right now, Annaly Capital Management is sporting a Zacks Rank of #2 (Buy), while Hannon Armstrong has a Zacks Rank of #3 (Hold). This means that NLY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

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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.

NLY currently has a forward P/E ratio of 8.51, while HASI has a forward P/E of 28.92. We also note that NLY has a PEG ratio of 1.70. 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. HASI currently has a PEG ratio of 5.41.

Another notable valuation metric for NLY is its P/B ratio of 1.01. 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, HASI has a P/B of 3.04.

Based on these metrics and many more, NLY holds a Value grade of B, while HASI has a Value grade of F.

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


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Annaly Capital Management Inc (NLY) : Free Stock Analysis Report
 
Hannon Armstrong Sustainable Infrastructure Capital, Inc. (HASI) : Free Stock Analysis Report
 
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