MAC vs. ADC: Which Stock Is the Better Value Option?
Investors interested in stocks from the REIT and Equity Trust - Retail sector have probably already heard of Macerich (MAC) and Agree Realty (ADC). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Macerich and Agree Realty are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MAC is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
MAC currently has a forward P/E ratio of 6.52, while ADC has a forward P/E of 16.58. We also note that MAC has a PEG ratio of 2.06. 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. ADC currently has a PEG ratio of 3.15.
Another notable valuation metric for MAC is its P/B ratio of 0.89. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ADC has a P/B of 1.28.
Based on these metrics and many more, MAC holds a Value grade of B, while ADC has a Value grade of D.
MAC is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that MAC is likely the superior value option right now.
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Macerich Company (The) (MAC) : Free Stock Analysis Report
Agree Realty Corporation (ADC) : Free Stock Analysis Report
