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 presents investors with the better value opportunity right now? Let's take a closer look.
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.
Cousins Properties has a Zacks Rank of #2 (Buy), while EastGroup Properties has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CUZ has an improving earnings outlook. 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 7.89, while EGP has a forward P/E of 19.95. We also note that CUZ has a PEG ratio of 1.83. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. EGP currently has a PEG ratio of 2.78.
Another notable valuation metric for CUZ is its P/B ratio of 0.83. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, EGP has a P/B of 2.9.
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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