Investors interested in REIT and Equity Trust - Retail stocks are likely familiar with Tanger Factory Outlet (SKT) and Simon Property (SPG). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Tanger Factory Outlet is sporting a Zacks Rank of #2 (Buy), while Simon Property has a Zacks Rank of #3 (Hold). This means that SKT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
SKT currently has a forward P/E ratio of 9.58, while SPG has a forward P/E of 15.11. We also note that SKT has a PEG ratio of 1.88. 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. SPG currently has a PEG ratio of 2.49.
Another notable valuation metric for SKT is its P/B ratio of 4.17. 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, SPG has a P/B of 15.23.
Based on these metrics and many more, SKT holds a Value grade of B, while SPG has a Value grade of D.
SKT stands above SPG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SKT is the superior value option right now.
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Tanger Factory Outlet Centers, Inc. (SKT) : Free Stock Analysis Report
Simon Property Group, Inc. (SPG) : Free Stock Analysis Report
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