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EXC vs. OGE: Which Stock Should Value Investors Buy Now?

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Investors interested in Utility - Electric Power stocks are likely familiar with Exelon (EXC - Free Report) and OGE Energy (OGE - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Exelon and OGE Energy 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 EXC is likely seeing its earnings outlook improve to a greater extent. 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 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.

EXC currently has a forward P/E ratio of 17.36, while OGE has a forward P/E of 19.89. We also note that EXC has a PEG ratio of 2.74. 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. OGE currently has a PEG ratio of 3.15.

Another notable valuation metric for EXC is its P/B ratio of 1.71. 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, OGE has a P/B of 1.97.

These are just a few of the metrics contributing to EXC's Value grade of B and OGE's Value grade of C.

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


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