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Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both MGM Growth Properties (MGP) and Healthpeak (PEAK). But which of these two companies is the best option for those looking for undervalued stocks? 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.
Currently, MGM Growth Properties has a Zacks Rank of #1 (Strong Buy), while Healthpeak has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MGP likely has seen a stronger improvement to its earnings outlook than PEAK 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
MGP currently has a forward P/E ratio of 9.27, while PEAK has a forward P/E of 12.20. We also note that MGP has a PEG ratio of 1.44. 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. PEAK currently has a PEG ratio of 6.63.
Another notable valuation metric for MGP is its P/B ratio of 0.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PEAK has a P/B of 1.58.
Based on these metrics and many more, MGP holds a Value grade of B, while PEAK has a Value grade of F.
MGP has seen stronger estimate revision activity and sports more attractive valuation metrics than PEAK, so it seems like value investors will conclude that MGP is the superior option right now.
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MGM Growth Properties LLC (MGP) : Free Stock Analysis Report
Healthpeak Properties, Inc. (PEAK) : Free Stock Analysis Report
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