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EPR or FRT: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the REIT and Equity Trust - Retail sector have probably already heard of EPR Properties (EPR - Free Report) and Federal Realty Investment Trust (FRT - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Both EPR Properties and Federal Realty Investment Trust have a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

EPR currently has a forward P/E ratio of 9.70, while FRT has a forward P/E of 13.33. We also note that EPR has a PEG ratio of 3.32. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FRT currently has a PEG ratio of 3.80.

Another notable valuation metric for EPR is its P/B ratio of 1.6. 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, FRT has a P/B of 2.66.

These are just a few of the metrics contributing to EPR's Value grade of B and FRT's Value grade of C.

Both EPR and FRT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EPR is the superior value option right now.


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