Investors looking for stocks in the Real Estate - Operations sector might want to consider either Newmark Group (NMRK - Free Report) or Essential Properties Realty Trust, Inc. (EPRT - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.
Right now, both Newmark Group and Essential Properties Realty Trust, Inc. are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
NMRK currently has a forward P/E ratio of 5.25, while EPRT has a forward P/E of 18.22. We also note that NMRK has a PEG ratio of 0.62. 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. EPRT currently has a PEG ratio of 1.92.
Another notable valuation metric for NMRK is its P/B ratio of 1.50. 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. For comparison, EPRT has a P/B of 1.52.
These are just a few of the metrics contributing to NMRK's Value grade of B and EPRT's Value grade of F.
Both NMRK and EPRT are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NMRK is the superior value option right now.