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EVRG vs. SO: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Utility - Electric Power sector might want to consider either Evergy Inc (EVRG - Free Report) or Southern Co. (SO - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Evergy Inc is sporting a Zacks Rank of #2 (Buy), while Southern Co. has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EVRG is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

EVRG currently has a forward P/E ratio of 13.70, while SO has a forward P/E of 19.65. We also note that EVRG has a PEG ratio of 2.74. 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. SO currently has a PEG ratio of 2.83.

Another notable valuation metric for EVRG is its P/B ratio of 1.25. 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, SO has a P/B of 2.41.

These are just a few of the metrics contributing to EVRG's Value grade of B and SO's Value grade of D.

EVRG stands above SO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EVRG is the superior value option right now.


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