VEOEY vs. AWK: Which Stock Should Value Investors Buy 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 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.
Veolia Environnement SA and American Water Works are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VEOEY is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
VEOEY currently has a forward P/E ratio of 6.89, while AWK has a forward P/E of 23.17. We also note that VEOEY has a PEG ratio of 0.47. 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. AWK currently has a PEG ratio of 2.99.
Another notable valuation metric for VEOEY is its P/B ratio of 1.45. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, AWK has a P/B of 2.36.
Based on these metrics and many more, VEOEY holds a Value grade of A, while AWK has a Value grade of D.
VEOEY has seen stronger estimate revision activity and sports more attractive valuation metrics than AWK, so it seems like value investors will conclude that VEOEY is the superior option right now.
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Veolia Environnement SA (VEOEY) : Free Stock Analysis Report
American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
