NLY vs. HASI: Which Stock Is the Better Value Option?

Investors with an interest in REIT and Equity Trust stocks have likely encountered both Annaly Capital Management (NLY) and 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Annaly Capital Management and Hannon Armstrong are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that NLY likely has seen a stronger improvement to its earnings outlook than HASI has recently. But this is just one factor that value investors are interested in.

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.

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 5.25, while HASI has a forward P/E of 15.27. We also note that NLY has a PEG ratio of 1.05. 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 1.41.

Another notable valuation metric for NLY is its P/B ratio of 0.96. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, HASI has a P/B of 1.73.

These metrics, and several others, help NLY earn a Value grade of B, while HASI has been given a Value grade of D.

NLY has seen stronger estimate revision activity and sports more attractive valuation metrics than HASI, so it seems like value investors will conclude that NLY is the superior 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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