POR vs. ELP: Which Stock Is the Better Value Option?

Investors interested in Utility - Electric Power stocks are likely familiar with Portland General Electric (POR) and Paranaense de Energia (ELP). 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 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.

Both Portland General Electric and Paranaense de Energia have a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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 14.76, while ELP has a forward P/E of 63.53. We also note that POR has a PEG ratio of 4.35. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ELP currently has a PEG ratio of 4.39.

Another notable valuation metric for POR is its P/B ratio of 1.35. 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, ELP has a P/B of 1.43.

These are just a few of the metrics contributing to POR's Value grade of A and ELP's Value grade of C.

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

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This article originally published on Zacks Investment Research (zacks.com).

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