Investors interested in stocks from the REIT and Equity Trust - Retail sector have probably already heard of Brixmor Property (BRX - Free Report) and Realty Income Corp. (O - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Brixmor Property has a Zacks Rank of #2 (Buy), while Realty Income Corp. has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BRX is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
BRX currently has a forward P/E ratio of 10.63, while O has a forward P/E of 23.95. We also note that BRX has a PEG ratio of 2.29. 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. O currently has a PEG ratio of 6.18.
Another notable valuation metric for BRX is its P/B ratio of 2.18. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, O has a P/B of 2.83.
Based on these metrics and many more, BRX holds a Value grade of B, while O has a Value grade of F.
BRX has seen stronger estimate revision activity and sports more attractive valuation metrics than O, so it seems like value investors will conclude that BRX is the superior option right now.