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EXC vs. OGE: Which Stock Is the Better Value Option?

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Investors with an interest in Utility - Electric Power stocks have likely encountered both Exelon (EXC - Free Report) and OGE Energy (OGE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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.

Currently, Exelon has a Zacks Rank of #2 (Buy), while OGE Energy has a Zacks Rank of #3 (Hold). 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. But this is just one piece of the puzzle for value investors.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

EXC currently has a forward P/E ratio of 17.24, while OGE has a forward P/E of 20.10. We also note that EXC has a PEG ratio of 2.86. 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 3.50.

Another notable valuation metric for EXC is its P/B ratio of 1.72. 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 1.98.

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

EXC has seen stronger estimate revision activity and sports more attractive valuation metrics than OGE, so it seems like value investors will conclude that EXC is the superior option right now.


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