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POR or HE: Which Is the Better Value Stock Right Now?

Investors interested in Utility - Electric Power stocks are likely familiar with Portland General Electric (POR) and Hawaiian Electric (HE). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Portland General Electric and Hawaiian Electric are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that POR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

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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.

POR currently has a forward P/E ratio of 18.67, while HE has a forward P/E of 18.84. We also note that POR has a PEG ratio of 4.99. 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. HE currently has a PEG ratio of 7.33.

Another notable valuation metric for POR is its P/B ratio of 1.71. 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, HE has a P/B of 1.97.

These metrics, and several others, help POR earn a Value grade of B, while HE has been given a Value grade of C.

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


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Portland General Electric Company (POR) : Free Stock Analysis Report
 
Hawaiian Electric Industries, Inc. (HE) : Free Stock Analysis Report
 
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