SKT or EQIX: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the REIT and Equity Trust - Retail sector have probably already heard of Tanger Factory Outlet (SKT) and Equinix (EQIX). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Tanger Factory Outlet is sporting a Zacks Rank of #2 (Buy), while Equinix has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SKT has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
SKT currently has a forward P/E ratio of 8.49, while EQIX has a forward P/E of 21.60. We also note that SKT has a PEG ratio of 1.03. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. EQIX currently has a PEG ratio of 2.33.
Another notable valuation metric for SKT is its P/B ratio of 3.07. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, EQIX has a P/B of 5.37.
Based on these metrics and many more, SKT holds a Value grade of B, while EQIX has a Value grade of D.
SKT sticks out from EQIX in both our Zacks Rank and Style Scores models, so value investors will likely feel that SKT is the better option right now.
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Tanger Factory Outlet Centers, Inc. (SKT) : Free Stock Analysis Report
Equinix, Inc. (EQIX) : Free Stock Analysis Report
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