NEP vs. EVRG: Which Stock Is the Better Value Option?
Investors looking for stocks in the Alternative Energy - Other sector might want to consider either NextEra Energy Partners (NEP) or Evergy Inc (EVRG). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
NextEra Energy Partners and Evergy Inc are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
NEP currently has a forward P/E ratio of 10.09, while EVRG has a forward P/E of 22.10. We also note that NEP has a PEG ratio of 1.12. 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. EVRG currently has a PEG ratio of 2.86.
Another notable valuation metric for NEP is its P/B ratio of 0.64. 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, EVRG has a P/B of 1.43.
These are just a few of the metrics contributing to NEP's Value grade of A and EVRG's Value grade of C.
Both NEP and EVRG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NEP is the superior value option right now.
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NextEra Energy Partners, LP (NEP) : Free Stock Analysis Report
Evergy Inc. (EVRG) : Free Stock Analysis Report
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