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SR or OGS: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Utility - Gas Distribution sector have probably already heard of Spire (SR) and ONE Gas (OGS). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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 Spire and ONE Gas are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

SR currently has a forward P/E ratio of 13.85, while OGS has a forward P/E of 16.65. We also note that SR has a PEG ratio of 2.52. 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. OGS currently has a PEG ratio of 3.33.

Another notable valuation metric for SR is its P/B ratio of 1.29. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, OGS has a P/B of 1.46.

Based on these metrics and many more, SR holds a Value grade of B, while OGS has a Value grade of D.

Both SR and OGS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SR is the superior value option right now.


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Spire Inc. (SR) : Free Stock Analysis Report
 
ONE Gas, Inc. (OGS) : Free Stock Analysis Report
 
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