TRTX vs. VTMX: Which Stock Is the Better Value Option?

Investors looking for stocks in the Real Estate - Operations sector might want to consider either TPG RE Finance Trust (TRTX) or Corporacion Inmobiliaria Vesta, S.A.B. de C.V. Sponsored ADR (VTMX). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.

TPG RE Finance Trust and Corporacion Inmobiliaria Vesta, S.A.B. de C.V. Sponsored ADR are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that TRTX'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 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.

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.

TRTX currently has a forward P/E ratio of 5.78, while VTMX has a forward P/E of 12.66. We also note that TRTX has a PEG ratio of 1.17. 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. VTMX currently has a PEG ratio of 3.79.

Another notable valuation metric for TRTX is its P/B ratio of 0.43. 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, VTMX has a P/B of 0.99.

Based on these metrics and many more, TRTX holds a Value grade of A, while VTMX has a Value grade of D.

TRTX sticks out from VTMX in both our Zacks Rank and Style Scores models, so value investors will likely feel that TRTX is the better option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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