EONGY vs. PNW: Which Stock Is the Better Value Option?
Investors with an interest in Utility - Electric Power stocks have likely encountered both E.ON SE (EONGY) and Pinnacle West (PNW). 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.
E.ON SE and Pinnacle West are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
EONGY currently has a forward P/E ratio of 9.69, while PNW has a forward P/E of 18.62. We also note that EONGY has a PEG ratio of 0.75. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PNW currently has a PEG ratio of 2.88.
Another notable valuation metric for EONGY is its P/B ratio of 1.36. 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, PNW has a P/B of 1.44.
Based on these metrics and many more, EONGY holds a Value grade of A, while PNW has a Value grade of C.
Both EONGY and PNW are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EONGY is the superior value option right now.
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E.ON SE (EONGY) : Free Stock Analysis Report
Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
