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EONGY vs. MGEE: Which Stock Is the Better Value Option?

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Investors with an interest in Utility - Electric Power stocks have likely encountered both E.ON SE (EONGY) and MGE (MGEE). 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.

Right now, E.ON SE is sporting a Zacks Rank of #2 (Buy), while MGE has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that EONGY has an improving earnings outlook. But this is just one piece of the puzzle 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 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.

EONGY currently has a forward P/E ratio of 13.86, while MGEE has a forward P/E of 27.86. We also note that EONGY has a PEG ratio of 1.64. 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. MGEE currently has a PEG ratio of 5.

Another notable valuation metric for EONGY is its P/B ratio of 1.96. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, MGEE has a P/B of 2.90.

Based on these metrics and many more, EONGY holds a Value grade of A, while MGEE has a Value grade of D.

EONGY 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 EONGY is likely the superior value option right now.


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E.ON SE (EONGY) : Free Stock Analysis Report
 
MGE Energy Inc. (MGEE) : Free Stock Analysis Report
 
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