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BRG vs. MAA: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the REIT and Equity Trust - Residential sector might want to consider either Bluerock or Mid-America Apartment Communities (MAA - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Bluerock is sporting a Zacks Rank of #2 (Buy), while Mid-America Apartment Communities has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BRG has an improving earnings outlook. 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 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.

BRG currently has a forward P/E ratio of 12.85, while MAA has a forward P/E of 16.81. We also note that BRG has a PEG ratio of 1.29. 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. MAA currently has a PEG ratio of 2.40.

Another notable valuation metric for BRG is its P/B ratio of 1.29. 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, MAA has a P/B of 1.80.

These are just a few of the metrics contributing to BRG's Value grade of B and MAA's Value grade of D.

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


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