Investors with an interest in REIT and Equity Trust - Retail stocks have likely encountered both EPR Properties (EPR) and Federal Realty Investment Trust (FRT). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, EPR Properties is sporting a Zacks Rank of #2 (Buy), while Federal Realty Investment Trust has a Zacks Rank of #3 (Hold). This means that EPR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
EPR currently has a forward P/E ratio of 9.80, while FRT has a forward P/E of 14.05. We also note that EPR has a PEG ratio of 2.93. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FRT currently has a PEG ratio of 3.73.
Another notable valuation metric for EPR is its P/B ratio of 1.63. 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, FRT has a P/B of 2.81.
Based on these metrics and many more, EPR holds a Value grade of B, while FRT has a Value grade of C.
EPR stands above FRT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EPR is the superior value option right now.
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Free: See Our Top Stock And 4 Runners UpEPR Properties (EPR) : Free Stock Analysis Report
Federal Realty Investment Trust (FRT) : 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.
