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 is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, City Office REIT has a Zacks Rank of #2 (Buy), while EastGroup Properties has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CIO likely has seen a stronger improvement to its earnings outlook than EGP has recently. However, value investors will care about much more than just this.
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.
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 6.19, while EGP has a forward P/E of 18.73. We also note that CIO 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. EGP currently has a PEG ratio of 3.42.
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 2.62.
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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