PEB vs. EGP: Which Stock Is the Better Value Option?
Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Pebblebrook Hotel (PEB) 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.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Pebblebrook Hotel and EastGroup Properties are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PEB has an improving earnings outlook. 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.
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.
PEB currently has a forward P/E ratio of 10.16, while EGP has a forward P/E of 22.13. We also note that PEB has a PEG ratio of 0.73. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EGP currently has a PEG ratio of 2.61.
Another notable valuation metric for PEB is its P/B ratio of 0.64. 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, EGP has a P/B of 3.26.
Based on these metrics and many more, PEB holds a Value grade of A, while EGP has a Value grade of F.
PEB stands above EGP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PEB is the superior value option right now.
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Pebblebrook Hotel Trust (PEB) : Free Stock Analysis Report
EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report
