EBR or WEC: Which Is the Better Value Stock Right Now?
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Investors interested in Utility - Electric Power stocks are likely familiar with Eletrobras (EBR) and 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.
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.
Eletrobras and WEC Energy Group are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that EBR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
EBR currently has a forward P/E ratio of 13.31, while WEC has a forward P/E of 16.11. We also note that EBR has a PEG ratio of 1.31. 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 2.03.
Another notable valuation metric for EBR is its P/B ratio of 0.66. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WEC has a P/B of 2.
These metrics, and several others, help EBR earn a Value grade of B, while WEC has been given a Value grade of C.
EBR has seen stronger estimate revision activity and sports more attractive valuation metrics than WEC, so it seems like value investors will conclude that EBR is the superior option right now.
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Centrais El?tricas Brasileiras SA (EBR) : Free Stock Analysis Report
WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report