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Are Investors Undervaluing Easterly Government Properties (DEA) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Easterly Government Properties (DEA - Free Report) . DEA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 6.99. This compares to its industry's average Forward P/E of 15.65. DEA's Forward P/E has been as high as 12.42 and as low as 6.61, with a median of 10.47, all within the past year.

Another valuation metric that we should highlight is DEA's P/B ratio of 0.68. 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. DEA's current P/B looks attractive when compared to its industry's average P/B of 1.79. Over the past 12 months, DEA's P/B has been as high as 1.11 and as low as 0.64, with a median of 0.90.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. DEA has a P/S ratio of 2.96. This compares to its industry's average P/S of 3.83.

Finally, investors should note that DEA has a P/CF ratio of 8.17. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.09. Over the past 52 weeks, DEA's P/CF has been as high as 13.97 and as low as 7.71, with a median of 11.69.

Value investors will likely look at more than just these metrics, but the above data helps show that Easterly Government Properties is likely undervalued currently. And when considering the strength of its earnings outlook, DEA sticks out at as one of the market's strongest value stocks.


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