Investors with an interest in Utility - Electric Power stocks have likely encountered both Portland General Electric (POR) and E.ON SE (EONGY). 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.
Portland General Electric and E.ON SE are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. Investors should feel comfortable knowing that POR likely has seen a stronger improvement to its earnings outlook than EONGY has recently. But this is only part of the picture for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
POR currently has a forward P/E ratio of 15.46, while EONGY has a forward P/E of 18.74. We also note that POR has a PEG ratio of 4.68. 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. EONGY currently has a PEG ratio of 5.77.
Another notable valuation metric for POR is its P/B ratio of 1.43. 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, EONGY has a P/B of 2.02.
Based on these metrics and many more, POR holds a Value grade of B, while EONGY has a Value grade of F.
POR stands above EONGY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that POR is the superior value option right now.
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Portland General Electric Company (POR): Free Stock Analysis Report E.ON SE (EONGY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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