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NRG or NEE: Which Is the Better Value Stock Right Now?
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Investors interested in Utility - Electric Power stocks are likely familiar with NRG Energy (NRG - Free Report) and NextEra Energy (NEE - 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.
Currently, both NRG Energy and NextEra Energy are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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.
NRG currently has a forward P/E ratio of 4.51, while NEE has a forward P/E of 24.81. We also note that NRG has a PEG ratio of 0.36. 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. NEE currently has a PEG ratio of 2.57.
Another notable valuation metric for NRG is its P/B ratio of 1.90. 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, NEE has a P/B of 3.16.
Based on these metrics and many more, NRG holds a Value grade of A, while NEE has a Value grade of D.
Both NRG and NEE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NRG is the superior value option right now.
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NRG or NEE: Which Is the Better Value Stock Right Now?
Investors interested in Utility - Electric Power stocks are likely familiar with NRG Energy (NRG - Free Report) and NextEra Energy (NEE - 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.
Currently, both NRG Energy and NextEra Energy are holding a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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.
NRG currently has a forward P/E ratio of 4.51, while NEE has a forward P/E of 24.81. We also note that NRG has a PEG ratio of 0.36. 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. NEE currently has a PEG ratio of 2.57.
Another notable valuation metric for NRG is its P/B ratio of 1.90. 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, NEE has a P/B of 3.16.
Based on these metrics and many more, NRG holds a Value grade of A, while NEE has a Value grade of D.
Both NRG and NEE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NRG is the superior value option right now.