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

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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 OGE Energy (OGE - 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 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, GDF Suez SA is sporting a Zacks Rank of #1 (Strong Buy), while OGE Energy has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that ENGIY likely has seen a stronger improvement to its earnings outlook than OGE has recently. 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.

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 5.76, while OGE has a forward P/E of 18.91. We also note that ENGIY has a PEG ratio of 1.56. 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 5.45.

Another notable valuation metric for ENGIY is its P/B ratio of 0.58. 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, OGE has a P/B of 1.91.

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

ENGIY has seen stronger estimate revision activity and sports more attractive valuation metrics than OGE, so it seems like value investors will conclude that ENGIY is the superior option right now.


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