Investors interested in REIT and Equity Trust - Other stocks are likely familiar with City Office REIT (CIO) and EastGroup Properties (EGP). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.

City Office REIT has a Zacks Rank of #2 (Buy), while EastGroup Properties 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 CIO is likely seeing its earnings outlook improve to a greater extent. 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.

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.

CIO currently has a forward P/E ratio of 4.14, while EGP has a forward P/E of 17.64. We also note that CIO has a PEG ratio of 0.69. 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. EGP currently has a PEG ratio of 3.05.

Another notable valuation metric for CIO is its P/B ratio of 0.30. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, EGP has a P/B of 2.36.

These are just a few of the metrics contributing to CIO's Value grade of A and EGP's Value grade of D.

CIO stands above EGP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CIO is the superior value option right now.

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City Office REIT, Inc. (CIO) : Free Stock Analysis Report

EastGroup Properties, Inc. (EGP) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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