Is E.ON (EONGY) a Great Value Stock Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is E.ON (EONGY). EONGY is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.88 right now. For comparison, its industry sports an average P/E of 15.50. Over the last 12 months, EONGY's Forward P/E has been as high as 13.46 and as low as 7.81, with a median of 10.39.
EONGY is also sporting a PEG ratio of 1.25. 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's PEG compares to its industry's average PEG of 2.25. EONGY's PEG has been as high as 1.66 and as low as 0.94, with a median of 1.25, all within the past year.
We should also highlight that EONGY has a P/B ratio of 1.08. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. EONGY's current P/B looks attractive when compared to its industry's average P/B of 2.18. Over the past 12 months, EONGY's P/B has been as high as 1.73 and as low as 0.73, with a median of 1.01.
If you're looking for another solid Utility - Electric Power value stock, take a look at NRG Energy (NRG). NRG is a # 1 (Strong Buy) stock with a Value score of A.
Shares of NRG Energy are currently trading at a forward earnings multiple of 6.46 and a PEG ratio of 0.54 compared to its industry's P/E and PEG ratios of 15.50 and 2.25, respectively.
Over the last 12 months, NRG's P/E has been as high as 13.06, as low as 2.87, with a median of 8.56, and its PEG ratio has been as high as 1.24, as low as 0.13, with a median of 0.69.
Furthermore, NRG Energy holds a P/B ratio of 1.45 and its industry's price-to-book ratio is 2.18. NRG's P/B has been as high as 2.82, as low as 1.42, with a median of 1.91 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that E.ON and NRG Energy are likely undervalued currently. And when considering the strength of its earnings outlook, EONGY and NRG sticks out as one of the market's strongest value stocks.
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
E.ON SE (EONGY) : Free Stock Analysis Report
NRG Energy, Inc. (NRG) : Free Stock Analysis Report
To read this article on Zacks.com click here.