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MGP or VTR: Which Is the Better Value Stock Right Now?

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Investors with an interest in REIT and Equity Trust - Other stocks have likely encountered both MGM Growth Properties and Ventas (VTR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, MGM Growth Properties is sporting a Zacks Rank of #1 (Strong Buy), while Ventas has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MGP likely has seen a stronger improvement to its earnings outlook than VTR has recently. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

MGP currently has a forward P/E ratio of 6.51, while VTR has a forward P/E of 6.58. We also note that MGP has a PEG ratio of 1.01. 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. VTR currently has a PEG ratio of 2.19.

Another notable valuation metric for MGP is its P/B ratio of 0.26. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, VTR has a P/B of 0.84.

These metrics, and several others, help MGP earn a Value grade of B, while VTR has been given a Value grade of C.

MGP sticks out from VTR in both our Zacks Rank and Style Scores models, so value investors will likely feel that MGP is the better option right now.


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