Advertisement
Canada markets open in 3 hours 9 minutes

  • 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

    0.7311
    +0.0013 (+0.18%)
     

  • CRUDE OIL

    82.77
    -0.04 (-0.05%)
     

  • Bitcoin CAD

    87,140.17
    -3,634.61 (-4.00%)
     

  • CMC Crypto 200

    1,360.84
    -21.73 (-1.57%)
     

  • GOLD FUTURES

    2,337.20
    -1.20 (-0.05%)
     

  • RUSSELL 2000

    1,995.43
    -7.22 (-0.36%)
     

  • 10-Yr Bond

    4.6520
    +0.0540 (+1.17%)
     

  • NASDAQ futures

    17,508.75
    -155.75 (-0.88%)
     

  • VOLATILITY

    16.12
    +0.15 (+0.94%)
     

  • FTSE

    8,093.14
    +52.76 (+0.66%)
     

  • NIKKEI 225

    37,628.48
    -831.60 (-2.16%)
     

  • CAD/EUR

    0.6813
    -0.0006 (-0.09%)
     

MDU vs. CPK: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Utility - Gas Distribution sector have probably already heard of MDU Resources (MDU) and Chesapeake Utilities (CPK). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, MDU Resources has a Zacks Rank of #2 (Buy), while Chesapeake Utilities has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MDU likely has seen a stronger improvement to its earnings outlook than CPK has recently. But this is just one factor that value investors are interested in.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

MDU currently has a forward P/E ratio of 17.53, while CPK has a forward P/E of 24.35. We also note that MDU has a PEG ratio of 2.92. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CPK currently has a PEG ratio of 3.48.

Another notable valuation metric for MDU is its P/B ratio of 2.14. 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, CPK has a P/B of 2.88.

Based on these metrics and many more, MDU holds a Value grade of B, while CPK has a Value grade of C.

MDU has seen stronger estimate revision activity and sports more attractive valuation metrics than CPK, so it seems like value investors will conclude that MDU is the superior 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
 
MDU Resources Group, Inc. (MDU) : Free Stock Analysis Report
 
Chesapeake Utilities Corporation (CPK) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research