Investors looking for stocks in the Utility - Electric Power sector might want to consider either PGE (POR - Free Report) or IdaCorp (IDA - 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.
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 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.
Right now, both PGE and IdaCorp are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
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.
POR currently has a forward P/E ratio of 20.11, while IDA has a forward P/E of 23.51. We also note that POR has a PEG ratio of 6.41. 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 8.46.
Another notable valuation metric for POR is its P/B ratio of 1.70. 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, IDA has a P/B of 2.20.
These metrics, and several others, help POR earn a Value grade of B, while IDA has been given a Value grade of D.
Both POR and IDA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that POR is the superior value option right now.