ESRT vs. EGP: Which Stock Is the Better Value Option?
Investors interested in REIT and Equity Trust - Other stocks are likely familiar with 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Empire State Realty Trust has a Zacks Rank of #2 (Buy), while EastGroup Properties has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ESRT is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
ESRT currently has a forward P/E ratio of 11.68, while EGP has a forward P/E of 31.40. We also note that ESRT has a PEG ratio of 1.40. 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 4.33.
Another notable valuation metric for ESRT is its P/B ratio of 0.89. 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 5.42.
These are just a few of the metrics contributing to ESRT's Value grade of B and EGP's Value grade of F.
ESRT has seen stronger estimate revision activity and sports more attractive valuation metrics than EGP, so it seems like value investors will conclude that ESRT is the superior 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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