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GEO vs. EGP: Which Stock Should Value Investors Buy Now?

·2 min read

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 is more attractive to value investors? We'll need to take a closer look to find out.

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 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.

Right now, Geo Group is sporting a Zacks Rank of #2 (Buy), while EastGroup Properties has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GEO likely has seen a stronger improvement to its earnings outlook than EGP has recently. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

GEO currently has a forward P/E ratio of 2.70, while EGP has a forward P/E of 26.65. We also note that GEO has a PEG ratio of 0.27. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EGP currently has a PEG ratio of 4.11.

Another notable valuation metric for GEO is its P/B ratio of 0.79. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, EGP has a P/B of 4.68.

These are just a few of the metrics contributing to GEO's Value grade of A and EGP's Value grade of D.

GEO stands above EGP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GEO is the superior value 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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