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Public Service Enterprise Group Incorporated (PEG) - free report >>
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Public Service Enterprise Group Incorporated (PEG) - free report >>
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ENLAY vs. PEG: Which Stock Is the Better Value Option?
Investors interested in Utility - Electric Power stocks are likely familiar with Enel SpA (ENLAY - Free Report) and PSEG (PEG - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, both Enel SpA and PSEG are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.
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 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.
ENLAY currently has a forward P/E ratio of 10.39, while PEG has a forward P/E of 18.38. We also note that ENLAY has a PEG ratio of 1.45. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PEG currently has a PEG ratio of 3.72.
Another notable valuation metric for ENLAY is its P/B ratio of 1.60. 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, PEG has a P/B of 2.09.
Based on these metrics and many more, ENLAY holds a Value grade of B, while PEG has a Value grade of C.
Both ENLAY and PEG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that ENLAY is the superior value option right now.