ESRT or EGP: Which Is the Better Value Stock Right Now?
Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Empire State Realty Trust (ESRT) and EastGroup Properties (EGP). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, both Empire State Realty Trust and EastGroup Properties are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ESRT currently has a forward P/E ratio of 7.26, while EGP has a forward P/E of 22.43. We also note that ESRT has a PEG ratio of 2.42. 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. EGP currently has a PEG ratio of 4.03.
Another notable valuation metric for ESRT is its P/B ratio of 0.59. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, EGP has a P/B of 3.72.
These metrics, and several others, help ESRT earn a Value grade of A, while EGP has been given a Value grade of D.
Both ESRT and EGP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ESRT is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Empire State Realty Trust, Inc. (ESRT) : Free Stock Analysis Report
EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report
