NI or NEE: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either NiSource (NI) or NextEra Energy (NEE). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
NiSource and NextEra Energy are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
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.
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.
NI currently has a forward P/E ratio of 20.56, while NEE has a forward P/E of 29.76. We also note that NI has a PEG ratio of 2.86. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. NEE currently has a PEG ratio of 3.20.
Another notable valuation metric for NI is its P/B ratio of 2.01. 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, NEE has a P/B of 3.78.
These metrics, and several others, help NI earn a Value grade of B, while NEE has been given a Value grade of D.
Both NI and NEE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NI is the superior value option right now.
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NiSource, Inc (NI) : Free Stock Analysis Report
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