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ALE vs. PNW: Which Stock Is the Better Value Option?
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Investors looking for stocks in the Utility - Electric Power sector might want to consider either Allete (ALE - Free Report) or Pinnacle West (PNW - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Allete has a Zacks Rank of #2 (Buy), while Pinnacle West has a Zacks Rank of #3 (Hold) right now. This means that ALE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
ALE currently has a forward P/E ratio of 16.75, while PNW has a forward P/E of 17.99. We also note that ALE has a PEG ratio of 2.07. 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. PNW currently has a PEG ratio of 3.05.
Another notable valuation metric for ALE is its P/B ratio of 1.04. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, PNW has a P/B of 1.33.
These are just a few of the metrics contributing to ALE's Value grade of B and PNW's Value grade of C.
ALE has seen stronger estimate revision activity and sports more attractive valuation metrics than PNW, so it seems like value investors will conclude that ALE is the superior option right now.
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ALE vs. PNW: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either Allete (ALE - Free Report) or Pinnacle West (PNW - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Allete has a Zacks Rank of #2 (Buy), while Pinnacle West has a Zacks Rank of #3 (Hold) right now. This means that ALE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
ALE currently has a forward P/E ratio of 16.75, while PNW has a forward P/E of 17.99. We also note that ALE has a PEG ratio of 2.07. 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. PNW currently has a PEG ratio of 3.05.
Another notable valuation metric for ALE is its P/B ratio of 1.04. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, PNW has a P/B of 1.33.
These are just a few of the metrics contributing to ALE's Value grade of B and PNW's Value grade of C.
ALE has seen stronger estimate revision activity and sports more attractive valuation metrics than PNW, so it seems like value investors will conclude that ALE is the superior option right now.