Investors interested in stocks from the REIT and Equity Trust sector have probably already heard of AGNC Investment (AGNC) and Blackstone Mortgage Trust (BXMT). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, AGNC Investment has a Zacks Rank of #2 (Buy), while Blackstone Mortgage Trust has a Zacks Rank of #4 (Sell). This means that AGNC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
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.
AGNC currently has a forward P/E ratio of 8.17, while BXMT has a forward P/E of 13.82. We also note that AGNC has a PEG ratio of 2.72. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. BXMT currently has a PEG ratio of 2.76.
Another notable valuation metric for AGNC is its P/B ratio of 0.99. 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, BXMT has a P/B of 1.31.
Based on these metrics and many more, AGNC holds a Value grade of B, while BXMT has a Value grade of F.
AGNC stands above BXMT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AGNC is the superior value option right now.
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AGNC Investment Corp. (AGNC) : Free Stock Analysis Report
Blackstone Mortgage Trust, Inc. (BXMT) : Free Stock Analysis Report
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