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MDU or OKE: 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 MDU Resources (MDU - Free Report) and Oneok Inc. (OKE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both MDU Resources and Oneok Inc. are sporting 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 only part of the picture for value investors.

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.

MDU currently has a forward P/E ratio of 13.83, while OKE has a forward P/E of 14.15. We also note that MDU has a PEG ratio of 2.77. 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. OKE currently has a PEG ratio of 3.06.

Another notable valuation metric for MDU is its P/B ratio of 1.80. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, OKE has a P/B of 3.07.

These metrics, and several others, help MDU earn a Value grade of B, while OKE has been given a Value grade of C.

Both MDU and OKE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MDU is the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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MDU Resources Group, Inc. (MDU) - free report >>

ONEOK, Inc. (OKE) - free report >>

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