Are Investors Undervaluing E.ON (EONGY) 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.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
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 company to watch right now 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 10.27. This compares to its industry's average Forward P/E of 12.20. 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 should also note that EONGY holds a PEG ratio of 0.80. 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. EONGY's industry currently sports an average PEG of 1.93. Over the last 12 months, EONGY's PEG has been as high as 1.35 and as low as 0.77, with a median of 1.12.
We should also highlight that EONGY has a P/B ratio of 1.37. 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 stock's P/B looks attractive against its industry's average P/B of 2.04. EONGY's P/B has been as high as 1.49 and as low as 0.74, with a median of 1.26, over the past year.
Finally, we should also recognize that EONGY has a P/CF ratio of 7.76. 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. This stock's P/CF looks attractive against its industry's average P/CF of 9.91. Over the past 52 weeks, EONGY's P/CF has been as high as 8.14 and as low as 2.09, with a median of 5.23.
Another great Utility - Electric Power stock you could consider is TransAlta (TAC), which is a # 1 (Strong Buy) stock with a Value Score of A.
TransAlta also has a P/B ratio of 2.55 compared to its industry's price-to-book ratio of 2.04. Over the past year, its P/B ratio has been as high as 3.24, as low as 1.87, with a median of 2.60.
These are only a few of the key metrics included in E.ON and TransAlta strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, EONGY and TAC look like an impressive value stock at the moment.
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E.ON SE (EONGY) : Free Stock Analysis Report
TransAlta Corporation (TAC) : Free Stock Analysis Report
