NI or WEC: Which Is the Better Value Stock Right Now?
Investors with an interest in Utility - Electric Power stocks have likely encountered both NiSource (NI) and WEC Energy Group (WEC). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, NiSource is sporting a Zacks Rank of #2 (Buy), while WEC Energy Group has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NI is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.
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 15.64, while WEC has a forward P/E of 17.49. We also note that NI has a PEG ratio of 2.23. 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. WEC currently has a PEG ratio of 3.04.
Another notable valuation metric for NI is its P/B ratio of 1.59. 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 2.12.
These are just a few of the metrics contributing to NI's Value grade of B and WEC's Value grade of C.
NI stands above WEC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NI is the superior value 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
NiSource, Inc (NI) : Free Stock Analysis Report
WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report
