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Is MGM Growth Properties (MGP) Stock Undervalued Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is MGM Growth Properties . MGP is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.22. This compares to its industry's average Forward P/E of 18.27. Over the last 12 months, MGP's Forward P/E has been as high as 14.36 and as low as 5.36, with a median of 13.24.

Investors should also note that MGP holds a PEG ratio of 1.44. 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. MGP's PEG compares to its industry's average PEG of 3.16. Within the past year, MGP's PEG has been as high as 9.61 and as low as 0.83, with a median of 3.62.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. MGP has a P/S ratio of 3.25. This compares to its industry's average P/S of 4.18.

Finally, investors should note that MGP has a P/CF ratio of 5.89. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. MGP's current P/CF looks attractive when compared to its industry's average P/CF of 17.61. Over the past year, MGP's P/CF has been as high as 8.63 and as low as 3.36, with a median of 7.25.

These are only a few of the key metrics included in MGM Growth Properties's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, MGP looks like an impressive value stock at the moment.

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