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

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Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either Geo Group (GEO - Free Report) or Crown Castle (CCI - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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.

Geo Group and Crown Castle are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GEO has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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 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 2.60, while CCI has a forward P/E of 28.94. We also note that GEO has a PEG ratio of 0.26. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CCI currently has a PEG ratio of 1.38.

Another notable valuation metric for GEO is its P/B ratio of 0.76. 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, CCI has a P/B of 9.53.

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

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


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