Advertisement
Canada markets closed

  • S&P/TSX

    21,873.72
    -138.00 (-0.63%)
     

  • S&P 500

    5,071.63
    +1.08 (+0.02%)
     

  • DOW

    38,460.92
    -42.77 (-0.11%)
     

  • CAD/USD

    0.7298
    -0.0022 (-0.31%)
     

  • CRUDE OIL

    82.80
    -0.56 (-0.67%)
     

  • Bitcoin CAD

    87,765.97
    -3,065.06 (-3.37%)
     

  • CMC Crypto 200

    1,384.17
    -39.93 (-2.80%)
     

  • GOLD FUTURES

    2,328.20
    -13.90 (-0.59%)
     

  • RUSSELL 2000

    1,995.43
    -7.22 (-0.36%)
     

  • 10-Yr Bond

    4.6520
    +0.0540 (+1.17%)
     

  • NASDAQ

    15,712.75
    +16.11 (+0.10%)
     

  • VOLATILITY

    15.97
    +0.28 (+1.78%)
     

  • FTSE

    8,040.38
    -4.43 (-0.06%)
     

  • NIKKEI 225

    38,460.08
    +907.92 (+2.42%)
     

  • CAD/EUR

    0.6818
    -0.0018 (-0.26%)
     
MARKETS LIVE BLOG:

STOCKS SHED GAINS, TESLA SURGES DAY AFTER EARNINGS

Tesla shares jump after EV maker vows to speed up launch of more affordable models

CNP vs. NGG: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Utility - Electric Power sector have probably already heard of CenterPoint Energy (CNP) and National Grid (NGG). 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.

Currently, CenterPoint Energy has a Zacks Rank of #2 (Buy), while National Grid has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CNP has an improving earnings outlook. However, value investors will care about much more than just this.

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.

ADVERTISEMENT

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.

CNP currently has a forward P/E ratio of 14.25, while NGG has a forward P/E of 15.91. We also note that CNP has a PEG ratio of 2.85. 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. NGG currently has a PEG ratio of 5.85.

Another notable valuation metric for CNP is its P/B ratio of 1.74. 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, NGG has a P/B of 1.85.

Based on these metrics and many more, CNP holds a Value grade of A, while NGG has a Value grade of C.

CNP sticks out from NGG in both our Zacks Rank and Style Scores models, so value investors will likely feel that CNP is the better 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
 
CenterPoint Energy, Inc. (CNP) : Free Stock Analysis Report
 
National Grid Transco, PLC (NGG) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.