U.S. Markets close in 6 hrs 12 mins
  • S&P 500

    -69.64 (-1.81%)
  • Dow 30

    -485.67 (-1.57%)
  • Nasdaq

    -265.04 (-1.95%)
  • Russell 2000

    -52.99 (-2.46%)
  • Crude Oil

    -0.44 (-0.84%)
  • Gold

    -17.80 (-0.96%)
  • Silver

    -0.71 (-2.79%)

    -0.0078 (-0.6396%)
  • 10-Yr Bond

    -0.0310 (-2.98%)
  • Vix

    +4.55 (+19.77%)

    -0.0008 (-0.0615%)

    +0.3990 (+0.3846%)

    -2,053.73 (-6.49%)
  • CMC Crypto 200

    -43.30 (-6.77%)
  • FTSE 100

    -114.98 (-1.73%)
  • Nikkei 225

    +89.01 (+0.31%)

MDU vs. NJR: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors interested in Utility - Gas Distribution stocks are likely familiar with MDU Resources (MDU) and New Jersey Resources (NJR). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

MDU Resources has a Zacks Rank of #2 (Buy), while New Jersey Resources has a Zacks Rank of #5 (Strong Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that MDU is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.

MDU currently has a forward P/E ratio of 14.13, while NJR has a forward P/E of 23.36. We also note that MDU has a PEG ratio of 2.83. 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. NJR currently has a PEG ratio of 3.89.

Another notable valuation metric for MDU is its P/B ratio of 1.83. 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, NJR has a P/B of 1.94.

These metrics, and several others, help MDU earn a Value grade of B, while NJR has been given a Value grade of C.

MDU sticks out from NJR in both our Zacks Rank and Style Scores models, so value investors will likely feel that MDU is the better option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MDU Resources Group, Inc. (MDU) : Free Stock Analysis Report
NewJersey Resources Corporation (NJR) : Free Stock Analysis Report
To read this article on Zacks.com click here.