Investors interested in stocks from the Utility - Electric Power sector have probably already heard of Portland General Electric (POR) and CenterPoint Energy (CNP). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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 Portland General Electric and CenterPoint Energy are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
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.
POR currently has a forward P/E ratio of 19.23, while CNP has a forward P/E of 23.14. We also note that POR has a PEG ratio of 5.14. 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. CNP currently has a PEG ratio of 5.95.
Another notable valuation metric for POR is its P/B ratio of 1.76. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CNP has a P/B of 2.19.
Based on these metrics and many more, POR holds a Value grade of B, while CNP has a Value grade of C.
Both POR and CNP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that POR is the superior value option right now.
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Portland General Electric Company (POR) : Free Stock Analysis Report
CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
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