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PNW or WEC: Which Is the Better Value Stock Right Now?

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Investors with an interest in Utility - Electric Power stocks have likely encountered both Pinnacle West (PNW - Free Report) and WEC Energy Group (WEC - 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Pinnacle West and WEC Energy Group are both sporting a Zacks Rank of # 2 (Buy) right now. 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 are also interested in a number of tried-and-true valuation metrics that help show when 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.

PNW currently has a forward P/E ratio of 19.89, while WEC has a forward P/E of 21.47. We also note that PNW has a PEG ratio of 4.45. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. WEC currently has a PEG ratio of 4.89.

Another notable valuation metric for PNW is its P/B ratio of 1.81. 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, WEC has a P/B of 2.30.

Based on these metrics and many more, PNW holds a Value grade of B, while WEC has a Value grade of C.

Both PNW and WEC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PNW is the superior value option right now.


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WEC Energy Group, Inc. (WEC) - free report >>

Pinnacle West Capital Corporation (PNW) - free report >>

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