NMRK vs. EPRT: Which Stock Is the Better Value Option?
Investors interested in stocks from the Real Estate - Operations sector have probably already heard of Newmark Group (NMRK) and Essential Properties Realty Trust, Inc. (EPRT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
Newmark Group has a Zacks Rank of #2 (Buy), while Essential Properties Realty Trust, Inc. has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NMRK is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 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.
NMRK currently has a forward P/E ratio of 5.66, while EPRT has a forward P/E of 20.20. We also note that NMRK has a PEG ratio of 0.65. 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. EPRT currently has a PEG ratio of 2.30.
Another notable valuation metric for NMRK is its P/B ratio of 1.63. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, EPRT has a P/B of 1.69.
Based on these metrics and many more, NMRK holds a Value grade of A, while EPRT has a Value grade of F.
NMRK stands above EPRT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NMRK is the superior value option right now.
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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.