Markets

BIP vs. UTL: Which Stock Should Value Investors Buy Now?

Investors with an interest in Utility - Electric Power stocks have likely encountered both Brookfield Infrastructure Partners (BIP) and Unitil (UTL). 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.

Brookfield Infrastructure Partners has a Zacks Rank of #2 (Buy), while Unitil has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BIP has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.

BIP currently has a forward P/E ratio of 12.19, while UTL has a forward P/E of 25.93. We also note that BIP has a PEG ratio of 1.27. 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. UTL currently has a PEG ratio of 6.52.

Another notable valuation metric for BIP is its P/B ratio of 0.96. 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, UTL has a P/B of 2.38.

These are just a few of the metrics contributing to BIP's Value grade of B and UTL's Value grade of C.

BIP is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BIP is likely the superior value option right now.


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Brookfield Infrastructure Partners LP (BIP): Free Stock Analysis Report

Unitil Corporation (UTL): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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