Is E.ON (EONGY) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is E.ON (EONGY). EONGY is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.11. This compares to its industry's average Forward P/E of 13.81. EONGY's Forward P/E has been as high as 13.85 and as low as 7.81, with a median of 11.46, all within the past year.
Investors will also notice that EONGY has a PEG ratio of 0.78. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. EONGY's industry has an average PEG of 2 right now. Over the last 12 months, EONGY's PEG has been as high as 1.35 and as low as 0.78, with a median of 1.16.
Another valuation metric that we should highlight is EONGY's P/B ratio of 1.35. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.06. Within the past 52 weeks, EONGY's P/B has been as high as 1.49 and as low as 0.74, with a median of 1.24.
Finally, we should also recognize that EONGY has a P/CF ratio of 7.66. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. EONGY's current P/CF looks attractive when compared to its industry's average P/CF of 10.18. EONGY's P/CF has been as high as 8.12 and as low as 2.09, with a median of 5.12, all within the past year.
Investors could also keep in mind TransAlta (TAC), an Utility - Electric Power stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
TransAlta also has a P/B ratio of 2.72 compared to its industry's price-to-book ratio of 2.06. Over the past year, its P/B ratio has been as high as 3.24, as low as 1.87, with a median of 2.53.
These figures are just a handful of the metrics value investors tend to look at, but they help show that E.ON and TransAlta are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, EONGY and TAC feels like a great value stock at the moment.
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E.ON SE (EONGY) : Free Stock Analysis Report
TransAlta Corporation (TAC) : Free Stock Analysis Report
