Investors interested in REIT and Equity Trust - Retail stocks are likely familiar with EPR Properties (EPR) and Simon Property (SPG). 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

EPR Properties and Simon Property are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that EPR likely has seen a stronger improvement to its earnings outlook than SPG has recently. But this is only part of the picture 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

EPR currently has a forward P/E ratio of 10.39, while SPG has a forward P/E of 12.83. We also note that EPR has a PEG ratio of 3.82. 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. SPG currently has a PEG ratio of 8.70.

Another notable valuation metric for EPR is its P/B ratio of 1.72. 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, SPG has a P/B of 17.58.

Based on these metrics and many more, EPR holds a Value grade of B, while SPG has a Value grade of C.

EPR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that EPR is likely the superior value option right now.

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EPR Properties (EPR):Free Stock Analysis Report

Simon Property Group, Inc. (SPG):Free Stock Analysis Report

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

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