NWN vs. OGS: Which Stock Should Value Investors Buy Now?
NWN vs. OGS: Which Stock Is the Better Value Option?
Investors interested in Utility - Gas Distribution stocks are likely familiar with Northwest Natural (NWN) and ONE Gas (OGS). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Northwest Natural has a Zacks Rank of #2 (Buy), while ONE Gas has a Zacks Rank of #3 (Hold) right now. This means that NWN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
NWN currently has a forward P/E ratio of 18.93, while OGS has a forward P/E of 20.18. We also note that NWN has a PEG ratio of 3.76. 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. OGS currently has a PEG ratio of 4.04.
Another notable valuation metric for NWN is its P/B ratio of 1.68. 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, OGS has a P/B of 1.79.
These are just a few of the metrics contributing to NWN's Value grade of B and OGS's Value grade of D.
NWN sticks out from OGS in both our Zacks Rank and Style Scores models, so value investors will likely feel that NWN is the better option right now.
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Northwest Natural Gas Company (NWN): Free Stock Analysis Report
ONE Gas, Inc. (OGS): Free Stock Analysis Report
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