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NiSource, Inc (NI) - free report >>
Public Service Enterprise Group Incorporated (PEG) - free report >>
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NiSource, Inc (NI) - free report >>
Public Service Enterprise Group Incorporated (PEG) - free report >>
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NI or PEG: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either NiSource (NI - Free Report) or PSEG (PEG - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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, NiSource is sporting a Zacks Rank of #2 (Buy), while PSEG has a Zacks Rank of #3 (Hold). This means that NI's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
NI currently has a forward P/E ratio of 16.53, while PEG has a forward P/E of 17.83. We also note that NI has a PEG ratio of 2.31. 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. PEG currently has a PEG ratio of 3.61.
Another notable valuation metric for NI is its P/B ratio of 1.65. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, PEG has a P/B of 2.03.
These are just a few of the metrics contributing to NI's Value grade of B and PEG's Value grade of C.
NI stands above PEG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NI is the superior value option right now.