Is Pinnacle West Capital (PNW) a Great Value Stock Right Now?

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

One stock to keep an eye on is Pinnacle West Capital (PNW). PNW is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value.

Another notable valuation metric for PNW is its P/B ratio of 1.30. 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. This stock's P/B looks attractive against its industry's average P/B of 2.14. Over the past year, PNW's P/B has been as high as 1.50 and as low as 1.06, with a median of 1.33.

Finally, investors should note that PNW has a P/CF ratio of 5.45. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. PNW's current P/CF looks attractive when compared to its industry's average P/CF of 12.38. Within the past 12 months, PNW's P/CF has been as high as 6.37 and as low as 4.44, with a median of 5.80.

Investors could also keep in mind RWE AG (RWEOY), an Utility - Electric Power stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.

Shares of RWE AG are currently trading at a forward earnings multiple of 10.25 and a PEG ratio of 7.07 compared to its industry's P/E and PEG ratios of 14.99 and 2.09, respectively.

Over the last 12 months, RWEOY's P/E has been as high as 20.53, as low as 8.72, with a median of 17.53, and its PEG ratio has been as high as 7.07, as low as 2.45, with a median of 3.97.

RWE AG sports a P/B ratio of 2.78 as well; this compares to its industry's price-to-book ratio of 2.14. In the past 52 weeks, RWEOY's P/B has been as high as 2.96, as low as 1.14, with a median of 2.31.

Value investors will likely look at more than just these metrics, but the above data helps show that Pinnacle West Capital and RWE AG are likely undervalued currently. And when considering the strength of its earnings outlook, PNW and RWEOY sticks out as one of the market's strongest value stocks.

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