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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is E.ON (EONGY - Free Report) . EONGY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.60. This compares to its industry's average Forward P/E of 11.80. Over the past 52 weeks, EONGY's Forward P/E has been as high as 13.85 and as low as 7.81, with a median of 11.46.
We also note that EONGY holds a PEG ratio of 0.74. 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. EONGY's PEG compares to its industry's average PEG of 1.94. Within the past year, EONGY's PEG has been as high as 1.35 and as low as 0.74, with a median of 1.07.
Investors should also recognize that EONGY has a P/B ratio of 1.29. 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 1.91. Within the past 52 weeks, EONGY's P/B has been as high as 1.49 and as low as 0.74, with a median of 1.34.
Finally, our model also underscores that EONGY has a P/CF ratio of 7.06. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. EONGY's current P/CF looks attractive when compared to its industry's average P/CF of 10.70. Over the past 52 weeks, EONGY's P/CF has been as high as 7.96 and as low as 2.09, with a median of 7.05.
If you're looking for another solid Utility - Electric Power value stock, take a look at TransAlta (TAC - Free Report) . TAC is a # 1 (Strong Buy) stock with a Value score of A.
Additionally, TransAlta has a P/B ratio of 2.22 while its industry's price-to-book ratio sits at 1.91. For TAC, this valuation metric has been as high as 3.24, as low as 1.87, with a median of 2.60 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that E.ON and TransAlta are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EONGY and TAC feels like a great value stock at the moment.
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Should Value Investors Buy E.ON (EONGY) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company to watch right now is E.ON (EONGY - Free Report) . EONGY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.60. This compares to its industry's average Forward P/E of 11.80. Over the past 52 weeks, EONGY's Forward P/E has been as high as 13.85 and as low as 7.81, with a median of 11.46.
We also note that EONGY holds a PEG ratio of 0.74. 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. EONGY's PEG compares to its industry's average PEG of 1.94. Within the past year, EONGY's PEG has been as high as 1.35 and as low as 0.74, with a median of 1.07.
Investors should also recognize that EONGY has a P/B ratio of 1.29. 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 1.91. Within the past 52 weeks, EONGY's P/B has been as high as 1.49 and as low as 0.74, with a median of 1.34.
Finally, our model also underscores that EONGY has a P/CF ratio of 7.06. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. EONGY's current P/CF looks attractive when compared to its industry's average P/CF of 10.70. Over the past 52 weeks, EONGY's P/CF has been as high as 7.96 and as low as 2.09, with a median of 7.05.
If you're looking for another solid Utility - Electric Power value stock, take a look at TransAlta (TAC - Free Report) . TAC is a # 1 (Strong Buy) stock with a Value score of A.
Additionally, TransAlta has a P/B ratio of 2.22 while its industry's price-to-book ratio sits at 1.91. For TAC, this valuation metric has been as high as 3.24, as low as 1.87, with a median of 2.60 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that E.ON and TransAlta are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EONGY and TAC feels like a great value stock at the moment.