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Should Value Investors Buy GDF Suez (ENGIY) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is GDF Suez (ENGIY - Free Report) . ENGIY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 5.72 right now. For comparison, its industry sports an average P/E of 15.65. ENGIY's Forward P/E has been as high as 7.10 and as low as 5.35, with a median of 6.12, all within the past year.
We also note that ENGIY holds a PEG ratio of 1.55. 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. ENGIY's PEG compares to its industry's average PEG of 2.18. Over the past 52 weeks, ENGIY's PEG has been as high as 1.64 and as low as 0.84, with a median of 1.02.
RWE AG (RWEOY - Free Report) may be another strong Utility - Electric Power stock to add to your shortlist. RWEOY is a # 2 (Buy) stock with a Value grade of A.
Shares of RWE AG currently holds a Forward P/E ratio of 12.10, and its PEG ratio is 2.71. In comparison, its industry sports average P/E and PEG ratios of 15.65 and 2.18.
Over the last 12 months, RWEOY's P/E has been as high as 20.53, as low as 11.14, with a median of 17.93, and its PEG ratio has been as high as 4.53, as low as 2.50, with a median of 3.95.
Additionally, RWE AG has a P/B ratio of 2.19 while its industry's price-to-book ratio sits at 2.56. For RWEOY, this valuation metric has been as high as 2.48, as low as 0.88, with a median of 1.29 over the past year.
These are only a few of the key metrics included in GDF Suez and RWE AG strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, ENGIY and RWEOY look like an impressive value stock at the moment.