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ENGIY vs. EXC: 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 GDF Suez SA (ENGIY - Free Report) and Exelon (EXC - 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.

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 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.

Currently, GDF Suez SA has a Zacks Rank of #2 (Buy), while Exelon 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 ENGIY has an improving earnings outlook. However, value investors will care about much more than just this.

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.

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.

ENGIY currently has a forward P/E ratio of 6.21, while EXC has a forward P/E of 20.25. We also note that ENGIY has a PEG ratio of 0.94. 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. EXC currently has a PEG ratio of 2.85.

Another notable valuation metric for ENGIY is its P/B ratio of 0.63. 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, EXC has a P/B of 1.92.

These metrics, and several others, help ENGIY earn a Value grade of A, while EXC has been given a Value grade of C.

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


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