Investors interested in stocks from the Utility - Electric Power sector have probably already heard of Korea Electric Power (KEP) and WEC Energy Group (WEC). 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.
Right now, both Korea Electric Power and WEC Energy Group are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
KEP currently has a forward P/E ratio of 20.44, while WEC has a forward P/E of 27.38. We also note that KEP has a PEG ratio of 4.09. 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. WEC currently has a PEG ratio of 4.40.
Another notable valuation metric for KEP is its P/B ratio of 0.17. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WEC has a P/B of 3.16.
These are just a few of the metrics contributing to KEP's Value grade of A and WEC's Value grade of F.
Both KEP and WEC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KEP is the superior value option right now.
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Korea Electric Power Corporation (KEP) : Free Stock Analysis Report
WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report
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