Investors looking for stocks in the REIT and Equity Trust - Other sector might want to consider either City Office REIT (CIO) or 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.

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.

City Office REIT and EastGroup Properties are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CIO likely has seen a stronger improvement to its earnings outlook than EGP has recently. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

CIO currently has a forward P/E ratio of 4.51, while EGP has a forward P/E of 20.26. We also note that CIO has a PEG ratio of 0.75. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EGP currently has a PEG ratio of 3.50.

Another notable valuation metric for CIO is its P/B ratio of 0.32. 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, EGP has a P/B of 2.72.

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

CIO has seen stronger estimate revision activity and sports more attractive valuation metrics than EGP, so it seems like value investors will conclude that CIO is the superior 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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