Investors interested in REIT and Equity Trust - Retail stocks are likely familiar with Phillips Edison & Company, Inc. (PECO) and Regency Centers (REG). But which of these two companies is the best option for those looking for undervalued stocks? 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 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, both Phillips Edison & Company, Inc. and Regency Centers are holding a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
PECO currently has a forward P/E ratio of 14.34, while REG has a forward P/E of 16.76. We also note that PECO has a PEG ratio of 1.00. 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. REG currently has a PEG ratio of 3.49.
Another notable valuation metric for PECO is its P/B ratio of 1.91. 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, REG has a P/B of 2.13.
Based on these metrics and many more, PECO holds a Value grade of B, while REG has a Value grade of D.
Both PECO and REG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PECO is the superior value option right now.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. Little-known AI firms tackling the world's biggest problems may be more lucrative in the coming months and years.
See Stocks Now >>Phillips Edison & Company, Inc. (PECO) : Free Stock Analysis Report
Regency Centers Corporation (REG) : 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.
