BRX vs. O: Which Stock Should Value Investors Buy Now?

Investors looking for stocks in the REIT and Equity Trust - Retail sector might want to consider either Brixmor Property (BRX) or Realty Income Corp. (O). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Brixmor Property is sporting a Zacks Rank of #2 (Buy), while Realty Income Corp. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BRX 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 also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

BRX currently has a forward P/E ratio of 10.31, while O has a forward P/E of 23.05. We also note that BRX has a PEG ratio of 2.23. 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. O currently has a PEG ratio of 5.95.

Another notable valuation metric for BRX is its P/B ratio of 2.12. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, O has a P/B of 2.72.

These metrics, and several others, help BRX earn a Value grade of B, while O has been given a Value grade of F.

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

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Brixmor Property Group Inc. (BRX) : Free Stock Analysis Report
 
Realty Income Corporation (O) : Free Stock Analysis Report
 
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