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KEP vs. OGE: Which Stock Should Value Investors Buy Now?

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Investors looking for stocks in the Utility - Electric Power sector might want to consider either Korea Electric Power (KEP - Free Report) or OGE Energy (OGE - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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, Korea Electric Power is sporting a Zacks Rank of #2 (Buy), while OGE Energy has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that KEP 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 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.

KEP currently has a forward P/E ratio of 7.59, while OGE has a forward P/E of 16.08. We also note that KEP has a PEG ratio of 1.52. 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. OGE currently has a PEG ratio of 3.64.

Another notable valuation metric for KEP is its P/B ratio of 0.22. 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, OGE has a P/B of 1.89.

Based on these metrics and many more, KEP holds a Value grade of A, while OGE has a Value grade of D.

KEP is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that KEP is likely the superior value option right now.


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