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PGRE or LXP: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Paramount Group (PGRE - Free Report) and Lexington Realty (LXP - Free Report) . 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.

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 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.

Right now, Paramount Group is sporting a Zacks Rank of #2 (Buy), while Lexington Realty has a Zacks Rank of #3 (Hold). This means that PGRE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.

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.

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.

PGRE currently has a forward P/E ratio of 9.37, while LXP has a forward P/E of 20.22. We also note that PGRE has a PEG ratio of 9.18. 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. LXP currently has a PEG ratio of 13.22.

Another notable valuation metric for PGRE is its P/B ratio of 0.41. 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, LXP has a P/B of 2.18.

These metrics, and several others, help PGRE earn a Value grade of A, while LXP has been given a Value grade of C.

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


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