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MGP vs. HIFR: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either MGM Growth Properties or InfraREIT . 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

MGM Growth Properties and InfraREIT 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 MGP 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 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.

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.

MGP currently has a forward P/E ratio of 14.09, while HIFR has a forward P/E of 16.51. We also note that MGP has a PEG ratio of 1.41. 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. HIFR currently has a PEG ratio of 3.30.

Another notable valuation metric for MGP is its P/B ratio of 0.36. 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, HIFR has a P/B of 1.02.

Based on these metrics and many more, MGP holds a Value grade of A, while HIFR has a Value grade of C.

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