Are Investors Undervaluing Empire State Realty Trust (ESRT) Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Empire State Realty Trust (ESRT). ESRT is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 7, while its industry has an average P/E of 14.76. ESRT's Forward P/E has been as high as 11.47 and as low as 6.76, with a median of 8.76, all within the past year.
Another notable valuation metric for ESRT is its P/B ratio of 0.58. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.71. ESRT's P/B has been as high as 0.93 and as low as 0.56, with a median of 0.72, over the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. ESRT has a P/S ratio of 1.3. This compares to its industry's average P/S of 3.62.
Finally, we should also recognize that ESRT has a P/CF ratio of 5.95. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ESRT's current P/CF looks attractive when compared to its industry's average P/CF of 13.95. ESRT's P/CF has been as high as 10.67 and as low as 5.71, with a median of 7.52, all within the past year.
Investors could also keep in mind Service Properties Trust (SVC), an REIT and Equity Trust - Other stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.
Service Properties Trust also has a P/B ratio of 1.09 compared to its industry's price-to-book ratio of 1.71. Over the past year, its P/B ratio has been as high as 1.35, as low as 0.56, with a median of 0.86.
These are just a handful of the figures considered in Empire State Realty Trust and Service Properties Trust's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that ESRT and SVC is an impressive value stock right now.
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Empire State Realty Trust, Inc. (ESRT) : Free Stock Analysis Report
Service Properties Trust (SVC) : Free Stock Analysis Report
