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BRG vs. ELS: Which Stock Is the Better Value Option?

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Investors interested in stocks from the REIT and Equity Trust - Residential sector have probably already heard of Bluerock and Equity Lifestyle Properties (ELS - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, Bluerock has a Zacks Rank of #2 (Buy), while Equity Lifestyle Properties has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BRG likely has seen a stronger improvement to its earnings outlook than ELS has recently. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

BRG currently has a forward P/E ratio of 15.85, while ELS has a forward P/E of 32.74. We also note that BRG has a PEG ratio of 2.64. 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. ELS currently has a PEG ratio of 7.07.

Another notable valuation metric for BRG is its P/B ratio of 3.84. 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, ELS has a P/B of 10.89.

These are just a few of the metrics contributing to BRG's Value grade of B and ELS's Value grade of D.

BRG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BRG is likely the superior value option right now.


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