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 presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
EPR Properties and Federal Realty Investment Trust are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
EPR currently has a forward P/E ratio of 10.28, while FRT has a forward P/E of 13.53. We also note that EPR has a PEG ratio of 3.23. 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. FRT currently has a PEG ratio of 3.60.
Another notable valuation metric for EPR is its P/B ratio of 1.71. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FRT has a P/B of 2.7.
Based on these metrics and many more, EPR holds a Value grade of B, while FRT has a Value grade of C.
EPR has seen stronger estimate revision activity and sports more attractive valuation metrics than FRT, so it seems like value investors will conclude that EPR is the superior option right now.
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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.
