PAM vs. OGE: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either Pampa Energia (PAM) or OGE Energy (OGE). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 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 #1 (Strong Buy), while OGE Energy has a Zacks Rank of #3 (Hold). This means that PAM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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 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.
PAM currently has a forward P/E ratio of 5.77, while OGE has a forward P/E of 18.57. We also note that PAM has a PEG ratio of 0.17. 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. OGE currently has a PEG ratio of 5.35.
Another notable valuation metric for PAM is its P/B ratio of 0.59. 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, OGE has a P/B of 1.87.
Based on these metrics and many more, PAM holds a Value grade of A, while OGE has a Value grade of D.
PAM has seen stronger estimate revision activity and sports more attractive valuation metrics than OGE, so it seems like value investors will conclude that PAM is the superior option right now.
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Pampa Energia S.A. (PAM) : Free Stock Analysis Report
OGE Energy Corporation (OGE) : Free Stock Analysis Report
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