Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Cousins Properties (CUZ) or 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Cousins Properties and EastGroup Properties are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CUZ likely has seen a stronger improvement to its earnings outlook than EGP has recently. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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 9.16, while EGP has a forward P/E of 20.25. We also note that CUZ has a PEG ratio of 2.05. 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 2.82.
Another notable valuation metric for CUZ is its P/B ratio of 0.92. 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 2.76.
Based on these metrics and many more, CUZ holds a Value grade of B, while EGP has a Value grade of D.
CUZ has seen stronger estimate revision activity and sports more attractive valuation metrics than EGP, so it seems like value investors will conclude that CUZ is the superior 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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