PAM or OGE: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Utility - Electric Power sector have probably already heard of Pampa Energia (PAM) and OGE Energy (OGE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Pampa Energia is sporting a Zacks Rank of #2 (Buy), while OGE Energy has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that PAM likely has seen a stronger improvement to its earnings outlook than OGE has recently. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
PAM currently has a forward P/E ratio of 4.49, while OGE has a forward P/E of 16.95. We also note that PAM has a PEG ratio of 0.31. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. OGE currently has a PEG ratio of 4.64.
Another notable valuation metric for PAM is its P/B ratio of 0.71. 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, OGE has a P/B of 1.56.
Based on these metrics and many more, PAM holds a Value grade of A, while OGE has a Value grade of C.
PAM stands above OGE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PAM is the superior value option right now.
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Pampa Energia S.A. (PAM) : Free Stock Analysis Report
OGE Energy Corporation (OGE) : Free Stock Analysis Report
