Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both City Office REIT (CIO) and EastGroup Properties (EGP). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 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.
Right now, City Office REIT is sporting a Zacks Rank of #2 (Buy), while EastGroup Properties has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CIO is likely seeing its earnings outlook improve to a greater extent. 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 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.
CIO currently has a forward P/E ratio of 6.21, while EGP has a forward P/E of 18.16. We also note that CIO has a PEG ratio of 1.03. 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 3.31.
Another notable valuation metric for CIO is its P/B ratio of 0.56. 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 2.54.
Based on these metrics and many more, CIO holds a Value grade of A, while EGP has a Value grade of D.
CIO stands above EGP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CIO is the superior value option right now.
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City Office REIT, Inc. (CIO): Free Stock Analysis Report EastGroup Properties, Inc. (EGP): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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