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ENGIY vs. OGE: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Utility - Electric Power sector might want to consider either GDF Suez SA (ENGIY - Free Report) or OGE Energy (OGE - 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.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight 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 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 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.

ENGIY currently has a forward P/E ratio of 6.19, while OGE has a forward P/E of 19.08. We also note that ENGIY has a PEG ratio of 1.67. 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 5.50.

Another notable valuation metric for ENGIY is its P/B ratio of 0.62. 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, OGE has a P/B of 1.93.

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

ENGIY 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 ENGIY is likely the superior value option right now.


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