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EVRG or SO: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Utility - Electric Power sector have probably already heard of Evergy Inc (EVRG - Free Report) and 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies 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). Investors should feel comfortable knowing that EVRG likely has seen a stronger improvement to its earnings outlook than SO has recently. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

EVRG currently has a forward P/E ratio of 15.55, while SO has a forward P/E of 21.84. We also note that EVRG has a PEG ratio of 3.11. 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. SO currently has a PEG ratio of 3.14.

Another notable valuation metric for EVRG is its P/B ratio of 1.42. 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 2.69.

Based on these metrics and many more, EVRG holds a Value grade of B, while SO has a Value grade of D.

EVRG has seen stronger estimate revision activity and sports more attractive valuation metrics than SO, so it seems like value investors will conclude that EVRG is the superior option right now.


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