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Investors looking for stocks in the Utility - Electric Power sector might want to consider either Iberdrola S.A. (IBDRY) or WEC Energy Group (WEC). 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.
Iberdrola S.A. has a Zacks Rank of #2 (Buy), while WEC Energy Group has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that IBDRY likely has seen a stronger improvement to its earnings outlook than WEC has recently. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
IBDRY currently has a forward P/E ratio of 15.20, while WEC has a forward P/E of 19.01. We also note that IBDRY has a PEG ratio of 1.82. 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. WEC currently has a PEG ratio of 2.51.
Another notable valuation metric for IBDRY is its P/B ratio of 1.33. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, WEC has a P/B of 2.55.
These are just a few of the metrics contributing to IBDRY's Value grade of B and WEC's Value grade of C.
IBDRY has seen stronger estimate revision activity and sports more attractive valuation metrics than WEC, so it seems like value investors will conclude that IBDRY is the superior option right now.
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Iberdrola S.A. (IBDRY) : Free Stock Analysis Report
WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report