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 companies is the best option for those looking for undervalued stocks? Let's 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.
Currently, Cousins Properties has a Zacks Rank of #2 (Buy), while EastGroup Properties 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 CUZ 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 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.
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.
CUZ currently has a forward P/E ratio of 9.08, while EGP has a forward P/E of 20.23. We also note that CUZ has a PEG ratio of 2.04. 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 2.73.
Another notable valuation metric for CUZ is its P/B ratio of 0.91. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, EGP has a P/B of 2.75.
These metrics, and several others, help CUZ earn a Value grade of B, while EGP has been given 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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EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
