Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Cousins Properties (CUZ) 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.
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.
Cousins Properties and EastGroup Properties are both sporting a Zacks Rank of #2 (Buy) right now. 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. 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 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.
CUZ currently has a forward P/E ratio of 9.40, while EGP has a forward P/E of 19.78. We also note that CUZ has a PEG ratio of 2.40. 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 3.61.
Another notable valuation metric for CUZ is its P/B ratio of 0.93. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, EGP has a P/B of 2.69.
These are just a few of the metrics contributing to CUZ's Value grade of B and EGP's Value grade of D.
Both CUZ and EGP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CUZ is the superior value option right now.
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Cousins Properties Incorporated (CUZ): 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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