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POR vs. HE: Which Stock Is the Better Value Option?

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Investors interested in Utility - Electric Power stocks are likely familiar with Portland General Electric (POR - Free Report) and Hawaiian Electric (HE - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Portland General Electric and Hawaiian Electric are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that POR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

POR currently has a forward P/E ratio of 18.10, while HE has a forward P/E of 18.23. We also note that POR has a PEG ratio of 4.84. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. HE currently has a PEG ratio of 7.09.

Another notable valuation metric for POR is its P/B ratio of 1.66. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, HE has a P/B of 1.90.

Based on these metrics and many more, POR holds a Value grade of B, while HE has a Value grade of C.

POR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that POR is likely the superior value option right now.


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Hawaiian Electric Industries, Inc. (HE) - free report >>

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