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MDV or EGP: Which Is the Better Value Stock Right Now?

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Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both Modiv Inc. (MDV - Free Report) and EastGroup Properties (EGP - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.

Modiv Inc. and EastGroup Properties are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that MDV's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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.

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.

MDV currently has a forward P/E ratio of 11.18, while EGP has a forward P/E of 21.86. We also note that MDV has a PEG ratio of 1.86. 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 2.78.

Another notable valuation metric for MDV is its P/B ratio of 0.48. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, EGP has a P/B of 3.32.

Based on these metrics and many more, MDV holds a Value grade of B, while EGP has a Value grade of D.

MDV 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 MDV is likely the superior value option right now.


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EastGroup Properties, Inc. (EGP) - free report >>

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