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FE vs. NEE: Which Stock Is the Better Value Option?
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Investors interested in Utility - Electric Power stocks are likely familiar with FirstEnergy (FE - Free Report) and NextEra Energy (NEE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, FirstEnergy has a Zacks Rank of #2 (Buy), while NextEra Energy has a Zacks Rank of #3 (Hold). This means that FE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
FE currently has a forward P/E ratio of 14.04, while NEE has a forward P/E of 21.30. We also note that FE has a PEG ratio of 2.18. 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. NEE currently has a PEG ratio of 2.54.
Another notable valuation metric for FE is its P/B ratio of 1.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NEE has a P/B of 2.50.
These metrics, and several others, help FE earn a Value grade of B, while NEE has been given a Value grade of D.
FE sticks out from NEE in both our Zacks Rank and Style Scores models, so value investors will likely feel that FE is the better option right now.
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FE vs. NEE: Which Stock Is the Better Value Option?
Investors interested in Utility - Electric Power stocks are likely familiar with FirstEnergy (FE - Free Report) and NextEra Energy (NEE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, FirstEnergy has a Zacks Rank of #2 (Buy), while NextEra Energy has a Zacks Rank of #3 (Hold). This means that FE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
FE currently has a forward P/E ratio of 14.04, while NEE has a forward P/E of 21.30. We also note that FE has a PEG ratio of 2.18. 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. NEE currently has a PEG ratio of 2.54.
Another notable valuation metric for FE is its P/B ratio of 1.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NEE has a P/B of 2.50.
These metrics, and several others, help FE earn a Value grade of B, while NEE has been given a Value grade of D.
FE sticks out from NEE in both our Zacks Rank and Style Scores models, so value investors will likely feel that FE is the better option right now.