Yahoo Finance VEOEY or AWK: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Utility - Water Supply sector have probably already heard of Veolia Environnement SA (VEOEY) and American Water Works (AWK). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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, Veolia Environnement SA has a Zacks Rank of #2 (Buy), while American Water Works has a Zacks Rank of #3 (Hold). This means that VEOEY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
VEOEY currently has a forward P/E ratio of 7.64, while AWK has a forward P/E of 24.96. We also note that VEOEY has a PEG ratio of 0.69. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. AWK currently has a PEG ratio of 3.12.
Another notable valuation metric for VEOEY is its P/B ratio of 1.54. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, AWK has a P/B of 2.55.
These metrics, and several others, help VEOEY earn a Value grade of A, while AWK has been given a Value grade of D.
VEOEY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that VEOEY is likely the superior value option right now.
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Veolia Environnement SA (VEOEY) : Free Stock Analysis Report
American Water Works Company, Inc. (AWK) : Free Stock Analysis Report
