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GEO or EGP: 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 EastGroup Properties (EGP - 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 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 has a Zacks Rank of #2 (Buy), while EastGroup Properties has a Zacks Rank of #3 (Hold) 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. 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.

GEO currently has a forward P/E ratio of 2.98, while EGP has a forward P/E of 29.68. We also note that GEO has a PEG ratio of 0.30. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EGP currently has a PEG ratio of 4.46.

Another notable valuation metric for GEO is its P/B ratio of 0.95. 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 5.11.

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

GEO 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 GEO is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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Geo Group Inc The (GEO) - free report >>

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