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NRG vs. NEE: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Utility - Electric Power stocks have likely encountered both NRG Energy (NRG - Free Report) and NextEra Energy (NEE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, NRG Energy is sporting a Zacks Rank of #2 (Buy), while NextEra Energy has a Zacks Rank of #3 (Hold). This means that NRG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
NRG currently has a forward P/E ratio of 11.43, while NEE has a forward P/E of 28.22. We also note that NRG has a PEG ratio of 1.19. 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. NEE currently has a PEG ratio of 3.03.
Another notable valuation metric for NRG is its P/B ratio of 1.82. 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, NEE has a P/B of 3.58.
These metrics, and several others, help NRG earn a Value grade of A, while NEE has been given a Value grade of D.
NRG stands above NEE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NRG is the superior value option right now.
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NRG vs. NEE: Which Stock Should Value Investors Buy Now?
Investors with an interest in Utility - Electric Power stocks have likely encountered both NRG Energy (NRG - Free Report) and NextEra Energy (NEE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, NRG Energy is sporting a Zacks Rank of #2 (Buy), while NextEra Energy has a Zacks Rank of #3 (Hold). This means that NRG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
NRG currently has a forward P/E ratio of 11.43, while NEE has a forward P/E of 28.22. We also note that NRG has a PEG ratio of 1.19. 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. NEE currently has a PEG ratio of 3.03.
Another notable valuation metric for NRG is its P/B ratio of 1.82. 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, NEE has a P/B of 3.58.
These metrics, and several others, help NRG earn a Value grade of A, while NEE has been given a Value grade of D.
NRG stands above NEE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NRG is the superior value option right now.