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NFG or CPK: Which Is the Better Value Stock Right Now?

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Investors with an interest in Utility - Gas Distribution stocks have likely encountered both National Fuel Gas (NFG - Free Report) and Chesapeake Utilities (CPK - Free Report) . 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, National Fuel Gas is sporting a Zacks Rank of #2 (Buy), while Chesapeake Utilities has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NFG is likely seeing its earnings outlook improve to a greater extent. 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.

NFG currently has a forward P/E ratio of 16.39, while CPK has a forward P/E of 24.75. We also note that NFG has a PEG ratio of 3.41. 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. CPK currently has a PEG ratio of 4.13.

Another notable valuation metric for NFG is its P/B ratio of 2.48. 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, CPK has a P/B of 2.76.

Based on these metrics and many more, NFG holds a Value grade of B, while CPK has a Value grade of C.

NFG has seen stronger estimate revision activity and sports more attractive valuation metrics than CPK, so it seems like value investors will conclude that NFG is the superior option right now.


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