Back to top

Image: Bigstock

Is MGM Growth Properties (MGP) Stock Undervalued Right Now?

Read MoreHide Full Article

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is MGM Growth Properties . MGP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 12.47, while its industry has an average P/E of 14.60. MGP's Forward P/E has been as high as 16.92 and as low as 11.84, with a median of 13.39, all within the past year.

Investors will also notice that MGP has a PEG ratio of 1.23. 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. MGP's PEG compares to its industry's average PEG of 2.64. Within the past year, MGP's PEG has been as high as 1.52 and as low as 0.69, with a median of 0.96.

Finally, investors will want to recognize that MGP has a P/CF ratio of 5.97. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. MGP's P/CF compares to its industry's average P/CF of 15.06. MGP's P/CF has been as high as 6.88 and as low as 5.56, with a median of 6.19, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that MGM Growth Properties is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, MGP feels like a great value stock at the moment.

Published in