POR vs. MGEE: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either PGE (POR) or MGE (MGEE). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.
Right now, both PGE and MGE are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
POR currently has a forward P/E ratio of 25.77, while MGEE has a forward P/E of 26.31. We also note that POR has a PEG ratio of 4.70. 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. MGEE currently has a PEG ratio of 6.01.
Another notable valuation metric for POR is its P/B ratio of 1.40. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, MGEE has a P/B of 2.52.
These are just a few of the metrics contributing to POR's Value grade of B and MGEE's Value grade of D.
Both POR and MGEE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that POR is the superior value option right now.
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Portland General Electric Company (POR) : Free Stock Analysis Report
MGE Energy Inc. (MGEE) : Free Stock Analysis Report
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