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CWT or AWK: Which Is the Better Value Stock Right Now?

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Investors interested in Utility - Water Supply stocks are likely familiar with California Water Service Group (CWT - Free Report) and American Water Works (AWK - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, California Water Service Group has a Zacks Rank of #2 (Buy), while American Water Works has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CWT likely has seen a stronger improvement to its earnings outlook than AWK has recently. But this is just one factor that value investors are interested in.

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 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.

CWT currently has a forward P/E ratio of 17.36, while AWK has a forward P/E of 20.77. We also note that CWT has a PEG ratio of 1.98. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AWK currently has a PEG ratio of 2.95.

Another notable valuation metric for CWT is its P/B ratio of 1.53. 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, AWK has a P/B of 2.27.

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

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


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American Water Works Company, Inc. (AWK) - free report >>

California Water Service Group (CWT) - free report >>

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