Investors interested in stocks from the Utility - Electric Power sector have probably already heard of PGE (POR - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, both PGE and IdaCorp are sporting a Zacks Rank of # 1 (Strong Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
POR currently has a forward P/E ratio of 19.18, while IDA has a forward P/E of 21.29. We also note that POR has a PEG ratio of 5.90. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. IDA currently has a PEG ratio of 8.28.
Another notable valuation metric for POR is its P/B ratio of 1.68. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, IDA has a P/B of 2.
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.