POR vs. WEC: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either Portland General Electric (POR) or WEC Energy Group (WEC). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Portland General Electric and WEC Energy Group are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that POR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
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 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 17.68, while WEC has a forward P/E of 19.88. We also note that POR has a PEG ratio of 3. 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. WEC currently has a PEG ratio of 3.45.
Another notable valuation metric for POR is its P/B ratio of 1.48. 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 2.41.
Based on these metrics and many more, POR holds a Value grade of B, while WEC has a Value grade of C.
POR stands above WEC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that POR is the superior value option right now.
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Portland General Electric Company (POR) : Free Stock Analysis Report
WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report
