Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Cousins Properties (CUZ) and EastGroup Properties (EGP). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 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, both Cousins Properties and EastGroup Properties are sporting a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
CUZ currently has a forward P/E ratio of 9.93, while EGP has a forward P/E of 21.00. We also note that CUZ has a PEG ratio of 1.93. 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. EGP currently has a PEG ratio of 3.02.
Another notable valuation metric for CUZ is its P/B ratio of 1.08. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, EGP has a P/B of 3.03.
These are just a few of the metrics contributing to CUZ's Value grade of B and EGP's Value grade of D.
Both CUZ and EGP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CUZ is the superior value option right now.
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Cousins Properties Incorporated (CUZ): Free Stock Analysis Report
EastGroup Properties, Inc. (EGP): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).