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POR vs. WEC: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either PGE (POR - Free Report) or WEC Energy Group (WEC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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.
PGE has a Zacks Rank of #2 (Buy), while WEC Energy Group 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 POR has an improving earnings outlook. However, value investors will care about much more than just this.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
POR currently has a forward P/E ratio of 17.60, while WEC has a forward P/E of 24.35. We also note that POR has a PEG ratio of 3.42. 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. WEC currently has a PEG ratio of 4.13.
Another notable valuation metric for POR is its P/B ratio of 1.43. 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, WEC has a P/B of 2.75.
Based on these metrics and many more, POR holds a Value grade of B, while WEC has a Value grade of C.
POR has seen stronger estimate revision activity and sports more attractive valuation metrics than WEC, so it seems like value investors will conclude that POR is the superior option right now.