Investors interested in Real Estate - Operations stocks are likely familiar with TPG RE Finance Trust (TRTX) and FirstService (FSV). 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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, TPG RE Finance Trust is sporting a Zacks Rank of #2 (Buy), while FirstService has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TRTX is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
TRTX currently has a forward P/E ratio of 9.04, while FSV has a forward P/E of 27.42. We also note that TRTX has a PEG ratio of 1.95. 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. FSV currently has a PEG ratio of 2.74.
Another notable valuation metric for TRTX is its P/B ratio of 0.66. 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, FSV has a P/B of 5.35.
These metrics, and several others, help TRTX earn a Value grade of B, while FSV has been given a Value grade of D.
TRTX is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TRTX is likely the superior value option right now.
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TPG RE Finance Trust, Inc. (TRTX): Free Stock Analysis Report FirstService Corporation (FSV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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