Investors with an interest in Utility - Electric Power stocks have likely encountered both Exelon (EXC) and OGE Energy (OGE). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both Exelon and OGE Energy are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
EXC currently has a forward P/E ratio of 15.22, while OGE has a forward P/E of 18.41. We also note that EXC has a PEG ratio of 2.69. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OGE currently has a PEG ratio of 3.68.
Another notable valuation metric for EXC is its P/B ratio of 1.42. 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, OGE has a P/B of 1.76.
Based on these metrics and many more, EXC holds a Value grade of B, while OGE has a Value grade of C.
Both EXC and OGE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EXC is the superior value option right now.
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Today, See These 5 Potential Home Runs >>Exelon Corporation (EXC) : Free Stock Analysis Report
OGE Energy Corporation (OGE) : 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.
