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FE or CNP: Which Is the Better Value Stock Right Now?
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Investors interested in Utility - Electric Power stocks are likely familiar with FirstEnergy (FE - Free Report) and CenterPoint Energy (CNP - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
FirstEnergy and CenterPoint Energy are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that FE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
FE currently has a forward P/E ratio of 16.31, while CNP has a forward P/E of 18.55. We also note that FE has a PEG ratio of 2.32. 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. CNP currently has a PEG ratio of 2.61.
Another notable valuation metric for FE is its P/B ratio of 1.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CNP has a P/B of 1.86.
Based on these metrics and many more, FE holds a Value grade of B, while CNP has a Value grade of C.
FE sticks out from CNP in both our Zacks Rank and Style Scores models, so value investors will likely feel that FE is the better option right now.
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FE or CNP: Which Is the Better Value Stock Right Now?
Investors interested in Utility - Electric Power stocks are likely familiar with FirstEnergy (FE - Free Report) and CenterPoint Energy (CNP - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
FirstEnergy and CenterPoint Energy are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that FE's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
FE currently has a forward P/E ratio of 16.31, while CNP has a forward P/E of 18.55. We also note that FE has a PEG ratio of 2.32. 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. CNP currently has a PEG ratio of 2.61.
Another notable valuation metric for FE is its P/B ratio of 1.85. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CNP has a P/B of 1.86.
Based on these metrics and many more, FE holds a Value grade of B, while CNP has a Value grade of C.
FE sticks out from CNP in both our Zacks Rank and Style Scores models, so value investors will likely feel that FE is the better option right now.