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GEO or EGP: Which Is the Better Value Stock Right Now?

·2-min read

Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Geo Group (GEO) and EastGroup Properties (EGP). 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.

Currently, both Geo Group and EastGroup Properties are holding a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

GEO currently has a forward P/E ratio of 2.99, while EGP has a forward P/E of 24.78. We also note that GEO has a PEG ratio of 0.30. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. EGP currently has a PEG ratio of 3.27.

Another notable valuation metric for GEO is its P/B ratio of 0.82. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, EGP has a P/B of 3.74.

Based on these metrics and many more, GEO holds a Value grade of A, while EGP has a Value grade of F.

Both GEO and EGP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GEO is the superior value option right now.

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Geo Group Inc The (GEO) : Free Stock Analysis Report
EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report
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