Yahoo Finance IBDRY vs. AEP: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either Iberdrola S.A. (IBDRY) or American Electric Power (AEP). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Iberdrola S.A. has a Zacks Rank of #2 (Buy), while American Electric Power has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IBDRY has an improving earnings outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
IBDRY currently has a forward P/E ratio of 17.27, while AEP has a forward P/E of 17.31. We also note that IBDRY has a PEG ratio of 2.15. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AEP currently has a PEG ratio of 3.02.
Another notable valuation metric for IBDRY is its P/B ratio of 1.35. 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, AEP has a P/B of 1.96.
These are just a few of the metrics contributing to IBDRY's Value grade of B and AEP's Value grade of C.
IBDRY sticks out from AEP in both our Zacks Rank and Style Scores models, so value investors will likely feel that IBDRY is the better option right now.
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Iberdrola S.A. (IBDRY) : Free Stock Analysis Report
American Electric Power Company, Inc. (AEP) : Free Stock Analysis Report
