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NXRT or ESS: Which Is the Better Value Stock Right Now?
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Investors interested in REIT and Equity Trust - Residential stocks are likely familiar with NexPoint Residential Trust Inc. (NXRT - Free Report) and Essex Property Trust (ESS - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, NexPoint Residential Trust Inc. has a Zacks Rank of #2 (Buy), while Essex Property Trust has a Zacks Rank of #3 (Hold). This means that NXRT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 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.
NXRT currently has a forward P/E ratio of 9.04, while ESS has a forward P/E of 13.97. We also note that NXRT has a PEG ratio of 1.13. 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. ESS currently has a PEG ratio of 2.18.
Another notable valuation metric for NXRT is its P/B ratio of 1.62. 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, ESS has a P/B of 2.34.
Based on these metrics and many more, NXRT holds a Value grade of B, while ESS has a Value grade of D.
NXRT stands above ESS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NXRT is the superior value option right now.
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NXRT or ESS: Which Is the Better Value Stock Right Now?
Investors interested in REIT and Equity Trust - Residential stocks are likely familiar with NexPoint Residential Trust Inc. (NXRT - Free Report) and Essex Property Trust (ESS - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, NexPoint Residential Trust Inc. has a Zacks Rank of #2 (Buy), while Essex Property Trust has a Zacks Rank of #3 (Hold). This means that NXRT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 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.
NXRT currently has a forward P/E ratio of 9.04, while ESS has a forward P/E of 13.97. We also note that NXRT has a PEG ratio of 1.13. 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. ESS currently has a PEG ratio of 2.18.
Another notable valuation metric for NXRT is its P/B ratio of 1.62. 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, ESS has a P/B of 2.34.
Based on these metrics and many more, NXRT holds a Value grade of B, while ESS has a Value grade of D.
NXRT stands above ESS thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NXRT is the superior value option right now.