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Investors interested in REIT and Equity Trust - Other stocks are likely familiar with Community Healthcare Trust (CHCT) and EastGroup Properties (EGP). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Community Healthcare Trust and EastGroup Properties are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CHCT likely has seen a stronger improvement to its earnings outlook than EGP has recently. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
CHCT currently has a forward P/E ratio of 9.04, while EGP has a forward P/E of 19.24. We also note that CHCT has a PEG ratio of 1.13. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EGP currently has a PEG ratio of 3.20.
Another notable valuation metric for CHCT is its P/B ratio of 1.19. 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 3.01.
These are just a few of the metrics contributing to CHCT's Value grade of B and EGP's Value grade of D.
CHCT stands above EGP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CHCT is the superior value option right now.
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Community Healthcare Trust Incorporated (CHCT) : Free Stock Analysis Report
EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report