U.S. Markets open in 3 hrs 38 mins
  • S&P Futures

    3,456.75
    +7.50 (+0.22%)
     
  • Dow Futures

    28,352.00
    +84.00 (+0.30%)
     
  • Nasdaq Futures

    11,656.00
    +6.25 (+0.05%)
     
  • Russell 2000 Futures

    1,636.90
    +6.30 (+0.39%)
     
  • Crude Oil

    40.80
    +0.16 (+0.39%)
     
  • Gold

    1,913.30
    +8.70 (+0.46%)
     
  • Silver

    24.89
    +0.18 (+0.71%)
     
  • EUR/USD

    1.1851
    +0.0025 (+0.2133%)
     
  • 10-Yr Bond

    0.8480
    0.0000 (0.00%)
     
  • Vix

    27.87
    -0.78 (-2.72%)
     
  • GBP/USD

    1.3088
    +0.0008 (+0.0641%)
     
  • USD/JPY

    104.6230
    -0.2170 (-0.2070%)
     
  • BTC-USD

    12,949.98
    -16.75 (-0.13%)
     
  • CMC Crypto 200

    261.37
    +5.27 (+2.06%)
     
  • FTSE 100

    5,863.28
    +77.63 (+1.34%)
     
  • Nikkei 225

    23,516.59
    +42.32 (+0.18%)
     

POR vs. WEC: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 mins read

Investors looking for stocks in the Utility - Electric Power sector might want to consider either PGE (POR) or WEC Energy Group (WEC). 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.

PGE has a Zacks Rank of #2 (Buy), while WEC Energy Group has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that POR has an improving earnings outlook. However, value investors will care about much more than just this.

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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

POR currently has a forward P/E ratio of 17.60, while WEC has a forward P/E of 24.35. We also note that POR has a PEG ratio of 3.42. 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 4.13.

Another notable valuation metric for POR is its P/B ratio of 1.43. 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 2.75.

Based on these metrics and many more, POR holds a Value grade of B, while WEC has a Value grade of C.

POR has seen stronger estimate revision activity and sports more attractive valuation metrics than WEC, so it seems like value investors will conclude that POR is the superior 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
 
Portland General Electric Company (POR) : Free Stock Analysis Report
 
WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research