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Public Service Enterprise Group Incorporated (PEG) - free report >>
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Public Service Enterprise Group Incorporated (PEG) - free report >>
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DTE or PEG: Which Is the Better Value Stock Right Now?
Investors interested in Utility - Electric Power stocks are likely familiar with DTE Energy (DTE - Free Report) and PSEG (PEG - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
DTE Energy has a Zacks Rank of #2 (Buy), while PSEG has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DTE has an improving earnings outlook. However, value investors will care about much more than just this.
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.
DTE currently has a forward P/E ratio of 18.12, while PEG has a forward P/E of 24.95. We also note that DTE has a PEG ratio of 2.26. 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. PEG currently has a PEG ratio of 3.36.
Another notable valuation metric for DTE is its P/B ratio of 2.19. 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, PEG has a P/B of 2.83.
These are just a few of the metrics contributing to DTE's Value grade of B and PEG's Value grade of D.
DTE has seen stronger estimate revision activity and sports more attractive valuation metrics than PEG, so it seems like value investors will conclude that DTE is the superior option right now.