Yahoo Finance PNW or OGE: Which Is the Better Value Stock Right Now?
Investors interested in Utility - Electric Power stocks are likely familiar with Pinnacle West (PNW) and OGE Energy (OGE). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Pinnacle West has a Zacks Rank of #2 (Buy), while OGE Energy has a Zacks Rank of #4 (Sell) right now. Investors should feel comfortable knowing that PNW likely has seen a stronger improvement to its earnings outlook than OGE has recently. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
PNW currently has a forward P/E ratio of 15.48, while OGE has a forward P/E of 15.85. We also note that PNW has a PEG ratio of 2.05. 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. OGE currently has a PEG ratio of 3.17.
Another notable valuation metric for PNW is its P/B ratio of 1.33. 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, OGE has a P/B of 1.50.
Based on these metrics and many more, PNW holds a Value grade of B, while OGE has a Value grade of C.
PNW 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 PNW is likely the superior value option right now.
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Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
OGE Energy Corporation (OGE) : Free Stock Analysis Report
