Investors looking for stocks in the Utility - Electric Power sector might want to consider either Korea Electric Power (KEP) or WEC Energy Group (WEC). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Korea Electric Power is sporting a Zacks Rank of #2 (Buy), while WEC Energy Group 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 KEP 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 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.
KEP currently has a forward P/E ratio of 17.09, while WEC has a forward P/E of 23.80. We also note that KEP has a PEG ratio of 3.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WEC currently has a PEG ratio of 4.02.
Another notable valuation metric for KEP is its P/B ratio of 0.18. 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, WEC has a P/B of 2.68.
These are just a few of the metrics contributing to KEP's Value grade of A and WEC's Value grade of C.
KEP has seen stronger estimate revision activity and sports more attractive valuation metrics than WEC, so it seems like value investors will conclude that KEP is the superior option right now.
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Korea Electric Power Corporation (KEP) : Free Stock Analysis Report
WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report
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