Yahoo Finance PNW vs. OGE: Which Stock Is the Better Value Option?
Investors interested in stocks from the Utility - Electric Power sector have probably already heard of Pinnacle West (PNW) and OGE Energy (OGE). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Pinnacle West has a Zacks Rank of #2 (Buy), while OGE Energy has a Zacks Rank of #4 (Sell) right now. This means that PNW's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
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.
PNW currently has a forward P/E ratio of 16.05, while OGE has a forward P/E of 16.55. We also note that PNW has a PEG ratio of 1.95. 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. OGE currently has a PEG ratio of 3.31.
Another notable valuation metric for PNW is its P/B ratio of 1.38. 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, OGE has a P/B of 1.59.
These metrics, and several others, help PNW earn a Value grade of B, while OGE has been given a Value grade of C.
PNW stands above OGE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PNW is the superior value option right now.
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Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report
OGE Energy Corporation (OGE) : Free Stock Analysis Report
