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TRTX or FSV: Which Is the Better Value Stock Right Now?

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Investors interested in Real Estate - Operations stocks are likely familiar with TPG RE Finance Trust (TRTX - Free Report) and FirstService (FSV - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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, TPG RE Finance Trust is sporting a Zacks Rank of #2 (Buy), while FirstService has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TRTX is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

TRTX currently has a forward P/E ratio of 8.99, while FSV has a forward P/E of 27.04. We also note that TRTX has a PEG ratio of 1.94. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FSV currently has a PEG ratio of 2.70.

Another notable valuation metric for TRTX is its P/B ratio of 0.65. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FSV has a P/B of 5.28.

These metrics, and several others, help TRTX earn a Value grade of B, while FSV has been given a Value grade of C.

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


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