Investors with an interest in REIT and Equity Trust - Residential stocks have likely encountered both Modiv Industrial, Inc. (MDV) and Essex Property Trust (ESS). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Modiv Industrial, Inc. and Essex Property Trust are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MDV is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
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.
MDV currently has a forward P/E ratio of 11.56, while ESS has a forward P/E of 14.20. We also note that MDV has a PEG ratio of 2.31. 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. ESS currently has a PEG ratio of 2.49.
Another notable valuation metric for MDV is its P/B ratio of 0.48. 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, ESS has a P/B of 2.40.
These are just a few of the metrics contributing to MDV's Value grade of B and ESS's Value grade of D.
MDV stands above ESS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that MDV is the superior value option right now.
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Essex Property Trust, Inc. (ESS) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
