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AEP or LNT: 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 American Electric Power (AEP - Free Report) and Alliant Energy (LNT - 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, American Electric Power has a Zacks Rank of #2 (Buy), while Alliant 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 AEP is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 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.
AEP currently has a forward P/E ratio of 18.08, while LNT has a forward P/E of 19.90. We also note that AEP has a PEG ratio of 3.23. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LNT currently has a PEG ratio of 3.62.
Another notable valuation metric for AEP is its P/B ratio of 1.86. 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, LNT has a P/B of 2.28.
These metrics, and several others, help AEP earn a Value grade of B, while LNT has been given a Value grade of C.
AEP stands above LNT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AEP is the superior value option right now.
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AEP or LNT: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Utility - Electric Power sector have probably already heard of American Electric Power (AEP - Free Report) and Alliant Energy (LNT - 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, American Electric Power has a Zacks Rank of #2 (Buy), while Alliant 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 AEP is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 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.
AEP currently has a forward P/E ratio of 18.08, while LNT has a forward P/E of 19.90. We also note that AEP has a PEG ratio of 3.23. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LNT currently has a PEG ratio of 3.62.
Another notable valuation metric for AEP is its P/B ratio of 1.86. 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, LNT has a P/B of 2.28.
These metrics, and several others, help AEP earn a Value grade of B, while LNT has been given a Value grade of C.
AEP stands above LNT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AEP is the superior value option right now.