PAM vs. OGE: Which Stock Should Value Investors Buy Now?
PAM vs. OGE: Which Stock Is the Better Value Option?
Investors interested in Utility - Electric Power stocks are likely familiar with Pampa Energia (PAM) 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Pampa Energia and OGE Energy are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that PAM is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
PAM currently has a forward P/E ratio of 4.26, while OGE has a forward P/E of 17.05. We also note that PAM has a PEG ratio of 0.09. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. OGE currently has a PEG ratio of 3.83.
Another notable valuation metric for PAM is its P/B ratio of 0.63. 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, OGE has a P/B of 1.97.
These are just a few of the metrics contributing to PAM's Value grade of A and OGE's Value grade of C.
PAM has seen stronger estimate revision activity and sports more attractive valuation metrics than OGE, so it seems like value investors will conclude that PAM is the superior option right now.
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Pampa Energia S.A. (PAM): Free Stock Analysis Report
OGE Energy Corporation (OGE): Free Stock Analysis Report
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