Investors with an interest in Utility - Electric Power stocks have likely encountered both DTE Energy (DTE) and WEC Energy Group (WEC). 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both DTE Energy and WEC Energy Group are holding a Zacks Rank of # 2 (Buy). 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 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.
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.
DTE currently has a forward P/E ratio of 19.16, while WEC has a forward P/E of 20.93. We also note that DTE has a PEG ratio of 2.51. 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 3.01.
Another notable valuation metric for DTE is its P/B ratio of 2.41. 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, WEC has a P/B of 2.61.
These are just a few of the metrics contributing to DTE's Value grade of B and WEC's Value grade of C.
Both DTE and WEC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DTE is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
DTE Energy Company (DTE): Free Stock Analysis Report WEC Energy Group, Inc. (WEC): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
