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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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AGR vs. PEG: Which Stock Is the Better Value Option?
Investors interested in Utility - Electric Power stocks are likely familiar with Avangrid (AGR - Free Report) and PSEG (PEG - 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 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.
Avangrid and PSEG are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AGR is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
AGR currently has a forward P/E ratio of 15.95, while PEG has a forward P/E of 17.50. We also note that AGR has a PEG ratio of 0.65. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PEG currently has a PEG ratio of 3.54.
Another notable valuation metric for AGR is its P/B ratio of 0.67. 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 2.07.
These are just a few of the metrics contributing to AGR's Value grade of B and PEG's Value grade of C.
AGR sticks out from PEG in both our Zacks Rank and Style Scores models, so value investors will likely feel that AGR is the better option right now.