Yahoo Finance EONGY vs. NEE: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either E.ON SE (EONGY) or NextEra Energy (NEE). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.
E.ON SE has a Zacks Rank of #2 (Buy), while NextEra Energy has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that EONGY likely has seen a stronger improvement to its earnings outlook than NEE has recently. But this is just one piece of the puzzle 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
EONGY currently has a forward P/E ratio of 10.81, while NEE has a forward P/E of 15.98. We also note that EONGY has a PEG ratio of 0.50. 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. NEE currently has a PEG ratio of 2.
Another notable valuation metric for EONGY is its P/B ratio of 1.40. 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, NEE has a P/B of 1.95.
These metrics, and several others, help EONGY earn a Value grade of B, while NEE has been given a Value grade of C.
EONGY sticks out from NEE in both our Zacks Rank and Style Scores models, so value investors will likely feel that EONGY is the better option right now.
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E.ON SE (EONGY) : Free Stock Analysis Report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
