GOOD vs. EGP: Which Stock Is the Better Value Option?
Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Gladstone Commercial (GOOD) 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, both Gladstone Commercial and EastGroup Properties are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle 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.
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.
GOOD currently has a forward P/E ratio of 7.90, while EGP has a forward P/E of 21.85. We also note that GOOD has a PEG ratio of 1.32. 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 2.74.
Another notable valuation metric for GOOD is its P/B ratio of 2.55. 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 3.42.
These metrics, and several others, help GOOD earn a Value grade of B, while EGP has been given a Value grade of F.
Both GOOD and EGP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GOOD is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Gladstone Commercial Corporation (GOOD) : Free Stock Analysis Report
EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report
