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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is NRG Energy (NRG - Free Report) . NRG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.57, which compares to its industry's average of 13.07. Over the past year, NRG's Forward P/E has been as high as 13.06 and as low as 4.45, with a median of 6.54.
We also note that NRG holds a PEG ratio of 0.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NRG's PEG compares to its industry's average PEG of 1.82. NRG's PEG has been as high as 1.24 and as low as 0.12, with a median of 0.55, all within the past year.
Another valuation metric that we should highlight is NRG's P/B ratio of 1.81. 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 1.99. NRG's P/B has been as high as 2.93 and as low as 1.59, with a median of 2.13, over the past year.
If you're looking for another solid Utility - Electric Power value stock, take a look at RWE AG (RWEOY - Free Report) . RWEOY is a # 2 (Buy) stock with a Value score of A.
RWE AG is trading at a forward earnings multiple of 8.77 at the moment, with a PEG ratio of 6.05. This compares to its industry's average P/E of 13.07 and average PEG ratio of 1.82.
RWEOY's price-to-earnings ratio has been as high as 20.53 and as low as 8.77, with a median of 17.77, while its PEG ratio has been as high as 6.29 and as low as 2.45, with a median of 3.79, all within the past year.
Furthermore, RWE AG holds a P/B ratio of 2.46 and its industry's price-to-book ratio is 1.99. RWEOY's P/B has been as high as 2.96, as low as 1.14, with a median of 2.18 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that NRG Energy and RWE AG are likely undervalued currently. And when considering the strength of its earnings outlook, NRG and RWEOY sticks out as one of the market's strongest value stocks.
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Is NRG Energy (NRG) Stock Undervalued Right Now?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
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 use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is NRG Energy (NRG - Free Report) . NRG is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 8.57, which compares to its industry's average of 13.07. Over the past year, NRG's Forward P/E has been as high as 13.06 and as low as 4.45, with a median of 6.54.
We also note that NRG holds a PEG ratio of 0.68. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NRG's PEG compares to its industry's average PEG of 1.82. NRG's PEG has been as high as 1.24 and as low as 0.12, with a median of 0.55, all within the past year.
Another valuation metric that we should highlight is NRG's P/B ratio of 1.81. 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 1.99. NRG's P/B has been as high as 2.93 and as low as 1.59, with a median of 2.13, over the past year.
If you're looking for another solid Utility - Electric Power value stock, take a look at RWE AG (RWEOY - Free Report) . RWEOY is a # 2 (Buy) stock with a Value score of A.
RWE AG is trading at a forward earnings multiple of 8.77 at the moment, with a PEG ratio of 6.05. This compares to its industry's average P/E of 13.07 and average PEG ratio of 1.82.
RWEOY's price-to-earnings ratio has been as high as 20.53 and as low as 8.77, with a median of 17.77, while its PEG ratio has been as high as 6.29 and as low as 2.45, with a median of 3.79, all within the past year.
Furthermore, RWE AG holds a P/B ratio of 2.46 and its industry's price-to-book ratio is 1.99. RWEOY's P/B has been as high as 2.96, as low as 1.14, with a median of 2.18 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that NRG Energy and RWE AG are likely undervalued currently. And when considering the strength of its earnings outlook, NRG and RWEOY sticks out as one of the market's strongest value stocks.