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NI vs. WEC: Which Stock Is the Better Value Option?

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Investors with an interest in Utility - Electric Power stocks have likely encountered both NiSource (NI - Free Report) and WEC Energy Group (WEC - 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.

NiSource and WEC Energy Group are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that NI likely has seen a stronger improvement to its earnings outlook than WEC has recently. However, value investors will care about much more than just this.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

NI currently has a forward P/E ratio of 15.65, while WEC has a forward P/E of 16.63. We also note that NI has a PEG ratio of 2.19. 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. WEC currently has a PEG ratio of 2.82.

Another notable valuation metric for NI is its P/B ratio of 1.15. 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, WEC has a P/B of 2.13.

Based on these metrics and many more, NI holds a Value grade of B, while WEC has a Value grade of D.

NI sticks out from WEC in both our Zacks Rank and Style Scores models, so value investors will likely feel that NI is the better option right now.


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