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 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Portland General Electric is sporting a Zacks Rank of #2 (Buy), while CenterPoint Energy has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that POR likely has seen a stronger improvement to its earnings outlook than CNP has recently. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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 15.11, while CNP has a forward P/E of 19.25. We also note that POR has a PEG ratio of 1.20. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CNP currently has a PEG ratio of 2.70.
Another notable valuation metric for POR is its P/B ratio of 1.36. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CNP has a P/B of 1.93.
These metrics, and several others, help POR earn a Value grade of A, while CNP has been given a Value grade of C.
POR sticks out from CNP in both our Zacks Rank and Style Scores models, so value investors will likely feel that POR is the better option right now.
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See them now >>Portland General Electric Company (POR) : Free Stock Analysis Report
CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
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