NI vs. WEC: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either NiSource (NI) or WEC Energy Group (WEC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
NiSource and WEC Energy Group are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that NI 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 analyze a variety of traditional, tried-and-true metrics to help find companies 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.
NI currently has a forward P/E ratio of 17.79, while WEC has a forward P/E of 20.55. We also note that NI has a PEG ratio of 2.62. 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. WEC currently has a PEG ratio of 3.52.
Another notable valuation metric for NI is its P/B ratio of 1.78. 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, WEC has a P/B of 2.57.
Based on these metrics and many more, NI holds a Value grade of B, while WEC has a Value grade of D.
NI sticks out from WEC in both our Zacks Rank and Style Scores models, so value investors will likely feel that NI is the better option right now.
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NiSource, Inc (NI) : Free Stock Analysis Report
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