VEOEY or AWK: Which Is the Better Value Stock Right Now?
Investors with an interest in Utility - Water Supply stocks have likely encountered both Veolia Environnement SA (VEOEY) and American Water Works (AWK). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Veolia Environnement SA and American Water Works have a Zacks Rank of # 2 (Buy) right now. 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 only part of the picture 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
VEOEY currently has a forward P/E ratio of 7.13, while AWK has a forward P/E of 22.52. We also note that VEOEY has a PEG ratio of 0.77. 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. AWK currently has a PEG ratio of 2.90.
Another notable valuation metric for VEOEY is its P/B ratio of 1.47. 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, AWK has a P/B of 2.33.
Based on these metrics and many more, VEOEY holds a Value grade of A, while AWK has a Value grade of D.
Both VEOEY and AWK are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that VEOEY is the superior value 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
Veolia Environnement SA (VEOEY) : Free Stock Analysis Report
American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
