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CNP or WEC: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Utility - Electric Power sector have probably already heard of CenterPoint Energy (CNP - Free Report) and 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.

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 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.

CenterPoint Energy and WEC Energy Group are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CNP likely has seen a stronger improvement to its earnings outlook than WEC has recently. But this is just one piece of the puzzle 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.

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.

CNP currently has a forward P/E ratio of 15.14, while WEC has a forward P/E of 21.82. We also note that CNP has a PEG ratio of 3.03. 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. WEC currently has a PEG ratio of 3.59.

Another notable valuation metric for CNP is its P/B ratio of 1.97. 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 2.62.

These are just a few of the metrics contributing to CNP's Value grade of B and WEC's Value grade of C.

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


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WEC Energy Group, Inc. (WEC) - free report >>

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