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AES or IDA: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors looking for stocks in the Utility - Electric Power sector might want to consider either AES (AES) or IdaCorp (IDA). 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 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.

Right now, both AES and IdaCorp are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

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.

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The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

AES currently has a forward P/E ratio of 12.31, while IDA has a forward P/E of 22.41. We also note that AES has a PEG ratio of 1.57. 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. IDA currently has a PEG ratio of 5.85.

Another notable valuation metric for AES is its P/B ratio of 1.94. 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, IDA has a P/B of 2.11.

Based on these metrics and many more, AES holds a Value grade of A, while IDA has a Value grade of D.

Both AES and IDA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AES is the superior value option right now.


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The AES Corporation (AES) : Free Stock Analysis Report
 
IDACORP, Inc. (IDA) : Free Stock Analysis Report
 
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Zacks Investment Research