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Should Value Investors Buy E.ON (EONGY) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is E.ON (EONGY - Free Report) . EONGY is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 13.65, which compares to its industry's average of 14.94. EONGY's Forward P/E has been as high as 13.85 and as low as 7.81, with a median of 10.51, all within the past year.

Investors should also note that EONGY holds a PEG ratio of 1.25. 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. EONGY's industry currently sports an average PEG of 2.23. Over the past 52 weeks, EONGY's PEG has been as high as 1.35 and as low as 0.94, with a median of 1.15.

Another valuation metric that we should highlight is EONGY's P/B ratio of 1.38. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. EONGY's current P/B looks attractive when compared to its industry's average P/B of 2.22. Within the past 52 weeks, EONGY's P/B has been as high as 1.40 and as low as 0.74, with a median of 1.03.

Finally, investors will want to recognize that EONGY has a P/CF ratio of 6. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. EONGY's current P/CF looks attractive when compared to its industry's average P/CF of 11.96. Over the past 52 weeks, EONGY's P/CF has been as high as 6.09 and as low as 2.09, with a median of 2.76.

If you're looking for another solid Utility - Electric Power value stock, take a look at Pampa Energia (PAM - Free Report) . PAM is a # 2 (Buy) stock with a Value score of A.

Pampa Energia is currently trading with a Forward P/E ratio of 5.82 while its PEG ratio sits at 0.09. Both of the company's metrics compare favorably to its industry's average P/E of 14.94 and average PEG ratio of 2.23.

PAM's Forward P/E has been as high as 13.63 and as low as 4.02, with a median of 5.69. During the same time period, its PEG ratio has been as high as 0.21, as low as 0.09, with a median of 0.16.

Additionally, Pampa Energia has a P/B ratio of 0.85 while its industry's price-to-book ratio sits at 2.22. For PAM, this valuation metric has been as high as 0.91, as low as 0.51, with a median of 0.64 over the past year.

These are just a handful of the figures considered in E.ON and Pampa Energia's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that EONGY and PAM is an impressive value stock right now.


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