Yahoo Finance DTE vs. SO: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either DTE Energy (DTE) or Southern Co. (SO). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, DTE Energy has a Zacks Rank of #2 (Buy), while Southern Co. has a Zacks Rank of #3 (Hold). This means that DTE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
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.
DTE currently has a forward P/E ratio of 17.44, while SO has a forward P/E of 19.87. We also note that DTE has a PEG ratio of 2.91. 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. SO currently has a PEG ratio of 4.42.
Another notable valuation metric for DTE is its P/B ratio of 2.16. 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, SO has a P/B of 2.44.
These are just a few of the metrics contributing to DTE's Value grade of B and SO's Value grade of D.
DTE is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that DTE is likely the superior value option right now.
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DTE Energy Company (DTE) : Free Stock Analysis Report
Southern Company (The) (SO) : Free Stock Analysis Report
