Should Value Investors Buy OGE Energy (OGE) Stock?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
OGE Energy (OGE) is a stock many investors are watching right now. OGE is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.
OGE is also sporting a PEG ratio of 0.98. 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. OGE's PEG compares to its industry's average PEG of 2.04. Within the past year, OGE's PEG has been as high as 5.88 and as low as 0.95, with a median of 3.82.
Investors should also recognize that OGE has a P/B ratio of 1.65. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.26. OGE's P/B has been as high as 2.01 and as low as 1.52, with a median of 1.76, over the past year.
Finally, investors will want to recognize that OGE has a P/CF ratio of 8.06. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. OGE's P/CF compares to its industry's average P/CF of 12.63. Over the past year, OGE's P/CF has been as high as 8.70 and as low as 4.91, with a median of 6.22.
Another great Utility - Electric Power stock you could consider is TransAlta (TAC), which is a # 1 (Strong Buy) stock with a Value Score of A.
TransAlta also has a P/B ratio of 2.59 compared to its industry's price-to-book ratio of 2.26. Over the past year, its P/B ratio has been as high as 3.24, as low as 1.87, with a median of 2.53.
These figures are just a handful of the metrics value investors tend to look at, but they help show that OGE Energy and TransAlta are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, OGE and TAC feels like a great value stock at the moment.
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OGE Energy Corporation (OGE) : Free Stock Analysis Report
TransAlta Corporation (TAC) : Free Stock Analysis Report
