Investors interested in Utility - Electric Power stocks are likely familiar with NiSource (NI - Free Report) and IdaCorp (IDA - 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, NiSource is sporting a Zacks Rank of #2 (Buy), while IdaCorp has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that NI has an improving earnings outlook. 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 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 20.83, while IDA has a forward P/E of 22.39. We also note that NI has a PEG ratio of 3.79. 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. IDA currently has a PEG ratio of 5.79.
Another notable valuation metric for NI is its P/B ratio of 2.01. 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, IDA has a P/B of 2.09.
Based on these metrics and many more, NI holds a Value grade of B, while IDA has a Value grade of D.
NI has seen stronger estimate revision activity and sports more attractive valuation metrics than IDA, so it seems like value investors will conclude that NI is the superior option right now.