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Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of City Office REIT (CIO) and EastGroup Properties (EGP). 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.
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.
Right now, City Office REIT is sporting a Zacks Rank of #1 (Strong Buy), while EastGroup Properties has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CIO is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CIO currently has a forward P/E ratio of 4.94, while EGP has a forward P/E of 17.74. We also note that CIO has a PEG ratio of 0.82. 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 1.93.
Another notable valuation metric for CIO is its P/B ratio of 0.34. 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 2.78.
These metrics, and several others, help CIO earn a Value grade of A, while EGP has been given a Value grade of D.
CIO sticks out from EGP in both our Zacks Rank and Style Scores models, so value investors will likely feel that CIO is the better option right now.
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City Office REIT, Inc. (CIO) : Free Stock Analysis Report
EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report