Are Investors Undervaluing These Utilities Stocks Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to...
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One stock to keep an eye on is Centrica (CPYYY). CPYYY is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 9.80. This compares to its industry's average Forward P/E of 15.66. Over the past year, CPYYY's Forward P/E has been as high as 23.60 and as low as 8.11, with a median of 10.74.
CPYYY is also sporting a PEG ratio of 1.75. 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. CPYYY's industry has an average PEG of 2.35 right now. CPYYY's PEG has been as high as 1.89 and as low as 1.72, with a median of 1.82, all within the past year.
We should also highlight that CPYYY has a P/B ratio of 1.44. 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. This stock's P/B looks attractive against its industry's average P/B of 2.08. CPYYY's P/B has been as high as 2.64 and as low as 0.91, with a median of 1.39, over the past year.
If you're looking for another solid Utility - Gas Distribution value stock, take a look at MDU Resources Group (MDU). MDU is a # 2 (Buy) stock with a Value score of A.
Shares of MDU Resources Group are currently trading at a forward earnings multiple of 14.26 and a PEG ratio of 2.10 compared to its industry's P/E and PEG ratios of 15.66 and 2.35, respectively.
Over the past year, MDU's P/E has been as high as 16.25, as low as 12.53, with a median of 14.43; its PEG ratio has been as high as 3.12, as low as 1.83, with a median of 1.82 during the same time period.
Furthermore, MDU Resources Group holds a P/B ratio of 1.91 and its industry's price-to-book ratio is 2.08. MDU's P/B has been as high as 2.24, as low as 1.65, with a median of 1.97 over the past 12 months.
These are just a handful of the figures considered in Centrica and MDU Resources Group's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that CPYYY and MDU is an impressive value stock right now.
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Centrica PLC (CPYYY): Free Stock Analysis Report
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