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BRG vs. MAA: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the REIT and Equity Trust - Residential sector have probably already heard of Bluerock and Mid-America Apartment Communities (MAA - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Bluerock has a Zacks Rank of #2 (Buy), while Mid-America Apartment Communities has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BRG is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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 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.

BRG currently has a forward P/E ratio of 13.46, while MAA has a forward P/E of 16.53. We also note that BRG has a PEG ratio of 1.35. 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. MAA currently has a PEG ratio of 2.36.

Another notable valuation metric for BRG is its P/B ratio of 1.36. 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, MAA has a P/B of 1.77.

These are just a few of the metrics contributing to BRG's Value grade of B and MAA's Value grade of D.

BRG has seen stronger estimate revision activity and sports more attractive valuation metrics than MAA, so it seems like value investors will conclude that BRG is the superior option right now.


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