Investors with an interest in Utility - Electric Power stocks have likely encountered both DTE Energy (DTE) and Centuri Holdings (CTRI). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
DTE Energy has a Zacks Rank of #2 (Buy), while Centuri Holdings has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DTE has an improving earnings 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.
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.
DTE currently has a forward P/E ratio of 17.88, while CTRI has a forward P/E of 54.60. We also note that DTE has a PEG ratio of 2.22. 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. CTRI currently has a PEG ratio of 15.29.
Another notable valuation metric for DTE is its P/B ratio of 2.16. 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, CTRI has a P/B of 3.39.
These metrics, and several others, help DTE earn a Value grade of B, while CTRI has been given a Value grade of C.
DTE 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 DTE is likely the superior value option right now.
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