EVRG or ED: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either Evergy Inc (EVRG) or Consolidated Edison (ED). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Evergy Inc has a Zacks Rank of #2 (Buy), while Consolidated Edison has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that EVRG likely has seen a stronger improvement to its earnings outlook than ED has recently. However, value investors will care about much more than just this.
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.
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.
EVRG currently has a forward P/E ratio of 15.34, while ED has a forward P/E of 18.92. We also note that EVRG has a PEG ratio of 3.07. 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. ED currently has a PEG ratio of 3.39.
Another notable valuation metric for EVRG is its P/B ratio of 1.39. 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, ED has a P/B of 1.61.
Based on these metrics and many more, EVRG holds a Value grade of B, while ED has a Value grade of C.
EVRG is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that EVRG is likely the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Evergy Inc. (EVRG) : Free Stock Analysis Report
Consolidated Edison Inc (ED) : Free Stock Analysis Report