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 companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Geo Group 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 GEO is likely seeing its earnings outlook improve to a greater extent. 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.
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 3.73, while EGP has a forward P/E of 22.64. We also note that GEO has a PEG ratio of 0.37. 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 2.99.
Another notable valuation metric for GEO is its P/B ratio of 1.03. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, EGP has a P/B of 3.44.
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
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