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MDV or ESS: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the REIT and Equity Trust - Residential sector have probably already heard of Modiv Industrial, Inc. (MDV) and Essex Property Trust (ESS). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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.

Modiv Industrial, Inc. and Essex Property Trust are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that MDV likely has seen a stronger improvement to its earnings outlook than ESS has recently. But this is only part of the picture 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.

MDV currently has a forward P/E ratio of 11.07, while ESS has a forward P/E of 14.37. We also note that MDV has a PEG ratio of 2.21. 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. ESS currently has a PEG ratio of 2.52.

Another notable valuation metric for MDV is its P/B ratio of 0.46. 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, ESS has a P/B of 2.43.

Based on these metrics and many more, MDV holds a Value grade of A, while ESS has a Value grade of D.

MDV has seen stronger estimate revision activity and sports more attractive valuation metrics than ESS, so it seems like value investors will conclude that MDV is the superior option right now.

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Essex Property Trust, Inc. (ESS) : Free Stock Analysis Report

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Zacks Investment Research