GEO vs. EGP: Which Stock Is the Better Value Option?
Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Geo Group (GEO) or EastGroup Properties (EGP). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Geo Group has a Zacks Rank of #2 (Buy), while EastGroup Properties has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GEO has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
GEO currently has a forward P/E ratio of 3.33, while EGP has a forward P/E of 23.68. We also note that GEO has a PEG ratio of 0.33. 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 3.01.
Another notable valuation metric for GEO is its P/B ratio of 0.94. 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 3.59.
These metrics, and several others, help GEO earn a Value grade of A, while EGP has been given a Value grade of D.
GEO sticks out from EGP in both our Zacks Rank and Style Scores models, so value investors will likely feel that GEO is the better option right now.
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Geo Group Inc The (GEO) : Free Stock Analysis Report
EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report
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