Investors interested in REIT and Equity Trust - Residential stocks are likely familiar with Preferred Apartment Communities and Mid-America Apartment Communities (MAA Quick QuoteMAA - 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, both Preferred Apartment Communities and Mid-America Apartment Communities are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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.

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.

APTS currently has a forward P/E ratio of 9.89, while MAA has a forward P/E of 21.14. We also note that APTS has a PEG ratio of 1.41. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. MAA currently has a PEG ratio of 5.42.

Another notable valuation metric for APTS is its P/B ratio of 0.36. 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, MAA has a P/B of 2.42.

These metrics, and several others, help APTS earn a Value grade of A, while MAA has been given a Value grade of D.

Both APTS and MAA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that APTS is the superior value option right now.