Back to top

Image: Bigstock

AKR vs. ADC: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in REIT and Equity Trust - Retail stocks are likely familiar with Acadia Realty Trust (AKR - Free Report) and Agree Realty (ADC - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Acadia Realty Trust has a Zacks Rank of #2 (Buy), while Agree Realty 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 AKR has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

AKR currently has a forward P/E ratio of 10.57, while ADC has a forward P/E of 16.66. We also note that AKR has a PEG ratio of 1.57. 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. ADC currently has a PEG ratio of 3.17.

Another notable valuation metric for AKR is its P/B ratio of 0.58. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ADC has a P/B of 1.28.

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

AKR stands above ADC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AKR is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Acadia Realty Trust (AKR) - free report >>

Agree Realty Corporation (ADC) - free report >>

Published in