ESRT vs. EGP: Which Stock Is the Better Value Option?
Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Empire State Realty Trust (ESRT) and EastGroup Properties (EGP). 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies 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. But this is only part of the picture for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
ESRT currently has a forward P/E ratio of 9.83, while EGP has a forward P/E of 23.08. We also note that ESRT has a PEG ratio of 3.07. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EGP currently has a PEG ratio of 3.34.
Another notable valuation metric for ESRT is its P/B ratio of 0.80. 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 3.60.
These are just a few of the metrics contributing to ESRT's Value grade of B and EGP's Value grade of F.
ESRT stands above EGP thanks to its solid earnings outlook, and based on these valuation figures, we also 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
