GEO or ILPT: Which Is the Better Value Stock Right Now?
GEO vs. ILPT: Which Stock Is the Better Value Option?
Investors interested in stocks from the REIT and Equity Trust - Other sector have probably already heard of Geo Group (GEO) and Industrial Logistics Properties Trust (ILPT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Geo Group and Industrial Logistics Properties Trust are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that GEO likely has seen a stronger improvement to its earnings outlook than ILPT has recently. 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.
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.
GEO currently has a forward P/E ratio of 3, while ILPT has a forward P/E of 14.11. We also note that GEO has a PEG ratio of 0.30. 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. ILPT currently has a PEG ratio of 5.98.
Another notable valuation metric for GEO is its P/B ratio of 0.96. 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, ILPT has a P/B of 1.75.
Based on these metrics and many more, GEO holds a Value grade of A, while ILPT has a Value grade of C.
GEO has seen stronger estimate revision activity and sports more attractive valuation metrics than ILPT, so it seems like value investors will conclude that GEO is the superior option right now.
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