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DTE vs. LNT: Which Stock Is the Better Value Option?

Zacks Equity Research
Crown Castle (CCI) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

Investors interested in Utility - Electric Power stocks are likely familiar with DTE Energy (DTE) and Alliant Energy (LNT). 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.

Currently, DTE Energy has a Zacks Rank of #2 (Buy), while Alliant Energy has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DTE is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

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.

DTE currently has a forward P/E ratio of 17.72, while LNT has a forward P/E of 20.26. We also note that DTE has a PEG ratio of 3.32. 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. LNT currently has a PEG ratio of 3.69.

Another notable valuation metric for DTE is its P/B ratio of 1.92. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, LNT has a P/B of 2.32.

These are just a few of the metrics contributing to DTE's Value grade of B and LNT's Value grade of C.

DTE has seen stronger estimate revision activity and sports more attractive valuation metrics than LNT, so it seems like value investors will conclude that DTE is the superior option right now.


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DTE Energy Company (DTE) : Free Stock Analysis Report
 
Alliant Energy Corporation (LNT) : Free Stock Analysis Report
 
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