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SKT vs. FRT: Which Stock Is the Better Value Option?

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Investors with an interest in REIT and Equity Trust - Retail stocks have likely encountered both Tanger Factory Outlet (SKT) and Federal Realty Investment Trust (FRT). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, both Tanger Factory Outlet and Federal Realty Investment Trust are holding a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.

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 10.21, while FRT has a forward P/E of 21.08. We also note that SKT has a PEG ratio of 1.22. 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. FRT currently has a PEG ratio of 3.90.

Another notable valuation metric for SKT is its P/B ratio of 3.69. 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, FRT has a P/B of 3.88.

Based on these metrics and many more, SKT holds a Value grade of B, while FRT has a Value grade of D.

Both SKT and FRT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SKT is the superior value option right now.


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Tanger Factory Outlet Centers, Inc. (SKT) : Free Stock Analysis Report
 
Federal Realty Investment Trust (FRT) : Free Stock Analysis Report
 
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