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PNW vs. NEE: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Utility - Electric Power sector have probably already heard of Pinnacle West (PNW - Free Report) and NextEra Energy (NEE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Both Pinnacle West and NextEra Energy have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.
PNW currently has a forward P/E ratio of 15.12, while NEE has a forward P/E of 18.19. We also note that PNW has a PEG ratio of 2. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NEE currently has a PEG ratio of 2.22.
Another notable valuation metric for PNW is its P/B ratio of 1.31. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NEE has a P/B of 2.22.
These are just a few of the metrics contributing to PNW's Value grade of B and NEE's Value grade of C.
Both PNW and NEE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PNW is the superior value option right now.
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PNW vs. NEE: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Utility - Electric Power sector have probably already heard of Pinnacle West (PNW - Free Report) and NextEra Energy (NEE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.
Both Pinnacle West and NextEra Energy have a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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.
PNW currently has a forward P/E ratio of 15.12, while NEE has a forward P/E of 18.19. We also note that PNW has a PEG ratio of 2. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NEE currently has a PEG ratio of 2.22.
Another notable valuation metric for PNW is its P/B ratio of 1.31. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NEE has a P/B of 2.22.
These are just a few of the metrics contributing to PNW's Value grade of B and NEE's Value grade of C.
Both PNW and NEE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PNW is the superior value option right now.