We've been asking ourselves recently if the market has placed a fair valuation on Welltower. Let's dive into some of the fundamental values of this large-cap Real Estate company to determine if there might be an opportunity here for value-minded investors.
Welltower Inc. is a real estate investment trust that invests in healthcare infrastructure. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 24.81 and an average price to book (P/B) ratio of 2.24. In contrast, Welltower has a trailing 12 month P/E ratio of 188.56 and a P/B ratio of 1.66.
When we divideWelltower's P/E ratio by its expected five-year EPS growth rate, we obtain a PEG ratio of 0.603, which indicates that the market is undervaluing the company's projected growth (a PEG ratio of 1 indicates a fairly valued company). Your analysis of the stock shouldn't end here. Rather, a good PEG ratio should alert you that it may be worthwhile to take a closer look at the stock.