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CMS vs. NEE: Which Stock Is the Better Value Option?
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Investors interested in Utility - Electric Power stocks are likely familiar with CMS Energy (CMS - Free Report) and NextEra Energy (NEE - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, CMS Energy is sporting a Zacks Rank of #2 (Buy), while NextEra Energy 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 CMS 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.
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.
CMS currently has a forward P/E ratio of 18.42, while NEE has a forward P/E of 21.14. We also note that CMS has a PEG ratio of 2.44. 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 2.46.
Another notable valuation metric for CMS is its P/B ratio of 2.21. 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, NEE has a P/B of 2.51.
Based on these metrics and many more, CMS holds a Value grade of B, while NEE has a Value grade of D.
CMS stands above NEE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CMS is the superior value option right now.
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CMS vs. NEE: Which Stock Is the Better Value Option?
Investors interested in Utility - Electric Power stocks are likely familiar with CMS Energy (CMS - Free Report) and NextEra Energy (NEE - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, CMS Energy is sporting a Zacks Rank of #2 (Buy), while NextEra Energy 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 CMS 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.
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.
CMS currently has a forward P/E ratio of 18.42, while NEE has a forward P/E of 21.14. We also note that CMS has a PEG ratio of 2.44. 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 2.46.
Another notable valuation metric for CMS is its P/B ratio of 2.21. 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, NEE has a P/B of 2.51.
Based on these metrics and many more, CMS holds a Value grade of B, while NEE has a Value grade of D.
CMS stands above NEE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CMS is the superior value option right now.