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SKT or SPG: Which Is the Better Value Stock Right Now?

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Investors with an interest in REIT and Equity Trust - Retail stocks have likely encountered both Tanger Factory Outlet (SKT - Free Report) and Simon Property (SPG - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Right now, Tanger Factory Outlet is sporting a Zacks Rank of #2 (Buy), while Simon Property has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SKT has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

SKT currently has a forward P/E ratio of 10.06, while SPG has a forward P/E of 10.36. We also note that SKT has a PEG ratio of 1.13. 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. SPG currently has a PEG ratio of 2.73.

Another notable valuation metric for SKT is its P/B ratio of 3.74. 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, SPG has a P/B of 11.95.

Based on these metrics and many more, SKT holds a Value grade of B, while SPG has a Value grade of C.

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


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Simon Property Group, Inc. (SPG) - free report >>

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