Investors with an interest in Utility - Electric Power stocks have likely encountered both Avangrid (AGR) and IdaCorp (IDA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Avangrid has a Zacks Rank of #2 (Buy), while IdaCorp has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AGR likely has seen a stronger improvement to its earnings outlook than IDA has recently. However, value investors will care about much more than just this.
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.
AGR currently has a forward P/E ratio of 22.87, while IDA has a forward P/E of 24.88. We also note that AGR has a PEG ratio of 3.06. 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. IDA currently has a PEG ratio of 6.46.
Another notable valuation metric for AGR is its P/B ratio of 1.02. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, IDA has a P/B of 1.80.
Based on these metrics and many more, AGR holds a Value grade of B, while IDA has a Value grade of C.
AGR 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 AGR is likely the superior value option right now.
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Avangrid, Inc. (AGR) : Free Stock Analysis Report
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