Advertisement
Singapore markets closed
  • Straits Times Index

    3,497.78
    +22.72 (+0.65%)
     
  • Nikkei

    41,190.68
    -1,033.34 (-2.45%)
     
  • Hang Seng

    18,293.38
    +461.05 (+2.59%)
     
  • FTSE 100

    8,252.91
    +29.57 (+0.36%)
     
  • Bitcoin USD

    57,948.55
    +951.86 (+1.67%)
     
  • CMC Crypto 200

    1,212.46
    +13.89 (+1.16%)
     
  • S&P 500

    5,615.35
    +30.81 (+0.55%)
     
  • Dow

    40,000.90
    +247.15 (+0.62%)
     
  • Nasdaq

    18,398.45
    +115.04 (+0.63%)
     
  • Gold

    2,416.00
    -5.90 (-0.24%)
     
  • Crude Oil

    82.18
    -0.44 (-0.53%)
     
  • 10-Yr Bond

    4.1890
    -0.0040 (-0.10%)
     
  • FTSE Bursa Malaysia

    1,619.06
    -4.06 (-0.25%)
     
  • Jakarta Composite Index

    7,327.58
    +27.17 (+0.37%)
     
  • PSE Index

    6,648.23
    +38.99 (+0.59%)
     

Should Value Investors Buy NRG Energy (NRG) Stock?

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is NRG Energy (NRG). NRG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 7.64, which compares to its industry's average of 15.44. NRG's Forward P/E has been as high as 13.06 and as low as 4.45, with a median of 8.56, all within the past year.

ADVERTISEMENT

Another valuation metric that we should highlight is NRG's P/B ratio of 1.48. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks attractive against its industry's average P/B of 2.23. Within the past 52 weeks, NRG's P/B has been as high as 2.93 and as low as 1.48, with a median of 1.96.

Investors could also keep in mind RWE AG (RWEOY), an Utility - Electric Power stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.

Shares of RWE AG are currently trading at a forward earnings multiple of 10.22 and a PEG ratio of 7.05 compared to its industry's P/E and PEG ratios of 15.44 and 2.24, respectively.

RWEOY's price-to-earnings ratio has been as high as 20.53 and as low as 8.72, with a median of 17.44, while its PEG ratio has been as high as 7.65 and as low as 2.45, with a median of 4.01, all within the past year.

RWE AG sports a P/B ratio of 2.97 as well; this compares to its industry's price-to-book ratio of 2.23. In the past 52 weeks, RWEOY's P/B has been as high as 3, as low as 1.14, with a median of 2.35.

These are just a handful of the figures considered in NRG Energy and RWE AG's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that NRG and RWEOY is an impressive value stock right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

NRG Energy, Inc. (NRG) : Free Stock Analysis Report

RWE AG (RWEOY) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research