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GEO vs. EGP: Which Stock Is the Better Value Option?

Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Geo Group (GEO) and EastGroup Properties (EGP). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.

Geo Group and EastGroup Properties are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GEO is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

GEO currently has a forward P/E ratio of 4.77, while EGP has a forward P/E of 22.26. We also note that GEO has a PEG ratio of 0.48. 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 2.94.

Another notable valuation metric for GEO is its P/B ratio of 1.25. 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 3.60.

These are just a few of the metrics contributing to GEO's Value grade of A and EGP's Value grade of F.

GEO has seen stronger estimate revision activity and sports more attractive valuation metrics than EGP, so it seems like value investors will conclude that GEO is the superior option right now.

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EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report

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