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HNP or IDA: Which Is the Better Value Stock Right Now?

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Zacks Equity Research
·2 min read
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Investors looking for stocks in the Utility - Electric Power sector might want to consider either Huaneng Power (HNP) or IdaCorp (IDA). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Huaneng Power has a Zacks Rank of #2 (Buy), while IdaCorp has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HNP is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

HNP currently has a forward P/E ratio of 6.47, while IDA has a forward P/E of 18.40. We also note that HNP has a PEG ratio of 0.49. 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. IDA currently has a PEG ratio of 6.99.

Another notable valuation metric for HNP is its P/B ratio of 0.26. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, IDA has a P/B of 1.73.

These metrics, and several others, help HNP earn a Value grade of A, while IDA has been given a Value grade of C.

HNP has seen stronger estimate revision activity and sports more attractive valuation metrics than IDA, so it seems like value investors will conclude that HNP is the superior option right now.


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Huaneng Power International, Inc. (HNP) : Free Stock Analysis Report
 
IDACORP, Inc. (IDA) : Free Stock Analysis Report
 
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