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EBR vs. OGE: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Utility - Electric Power sector have probably already heard of Eletrobras (EBR - Free Report) and OGE Energy (OGE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Eletrobras and OGE Energy are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EBR is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

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 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.

EBR currently has a forward P/E ratio of 6.54, while OGE has a forward P/E of 16.82. We also note that EBR has a PEG ratio of 2.14. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. OGE currently has a PEG ratio of 4.85.

Another notable valuation metric for EBR is its P/B ratio of 0.84. 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 1.70.

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

EBR sticks out from OGE in both our Zacks Rank and Style Scores models, so value investors will likely feel that EBR is the better option right now.


In-Depth Zacks Research for the Tickers Above


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OGE Energy Corporation (OGE) - free report >>

Centrais Eltricas Brasileiras SA (EBR) - free report >>

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