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 presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Empire State Realty Trust and EastGroup Properties are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
ESRT currently has a forward P/E ratio of 12.80, while EGP has a forward P/E of 29.34. We also note that ESRT has a PEG ratio of 1.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. EGP currently has a PEG ratio of 4.05.
Another notable valuation metric for ESRT is its P/B ratio of 0.99. 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, EGP has a P/B of 5.07.
These are just a few of the metrics contributing to ESRT's Value grade of B and EGP's Value grade of F.
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.
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Empire State Realty Trust, Inc. (ESRT) : Free Stock Analysis Report
EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report
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