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Is City Office REIT (CIO) a Great Value Stock Right Now?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One stock to keep an eye on is City Office REIT (CIO). CIO is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.71. This compares to its industry's average Forward P/E of 17.14. Over the past year, CIO's Forward P/E has been as high as 16.19 and as low as 7.71, with a median of 10.66.

CIO is also sporting a PEG ratio of 1.28. 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. CIO's industry currently sports an average PEG of 2.35. Over the last 12 months, CIO's PEG has been as high as 2.70 and as low as 1.28, with a median of 1.77.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. CIO has a P/S ratio of 2.9. This compares to its industry's average P/S of 5.08.

The Geo Group (GEO) may be another strong REIT and Equity Trust - Other stock to add to your shortlist. GEO is a # 1 (Strong Buy) stock with a Value grade of A.

The Geo Group is currently trading with a Forward P/E ratio of 2.91 while its PEG ratio sits at 0.29. Both of the company's metrics compare favorably to its industry's average P/E of 17.14 and average PEG ratio of 2.35.

GEO's price-to-earnings ratio has been as high as 4.08 and as low as 2.46, with a median of 3.13, while its PEG ratio has been as high as 0.41 and as low as 0.25, with a median of 0.31, all within the past year.

The Geo Group sports a P/B ratio of 0.81 as well; this compares to its industry's price-to-book ratio of 2.39. In the past 52 weeks, GEO's P/B has been as high as 1.16, as low as 0.66, with a median of 0.88.

Value investors will likely look at more than just these metrics, but the above data helps show that City Office REIT and The Geo Group are likely undervalued currently. And when considering the strength of its earnings outlook, CIO and GEO sticks out as one of the market's strongest value stocks.


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