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ENB or WMB: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Oil and Gas - Production and Pipelines sector might want to consider either Enbridge (ENB - Free Report) or Williams Companies, Inc. The (WMB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 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.

Enbridge and Williams Companies, Inc. The 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. 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.

ENB currently has a forward P/E ratio of 18.08, while WMB has a forward P/E of 24.69. We also note that ENB has a PEG ratio of 1.87. 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. WMB currently has a PEG ratio of 4.94.

Another notable valuation metric for ENB is its P/B ratio of 1.37. 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, WMB has a P/B of 1.63.

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

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


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