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HE vs. IDA: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors interested in Utility - Electric Power stocks are likely familiar with Hawaiian Electric (HE) and IdaCorp (IDA). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Hawaiian Electric has a Zacks Rank of #2 (Buy), while IdaCorp has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that HE likely has seen a stronger improvement to its earnings outlook than IDA has recently. However, value investors will care about much more than just this.

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.

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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.

HE currently has a forward P/E ratio of 18.49, while IDA has a forward P/E of 20.97. We also note that HE has a PEG ratio of 5.81. 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. IDA currently has a PEG ratio of 7.44.

Another notable valuation metric for HE is its P/B ratio of 1.92. 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, IDA has a P/B of 1.97.

These metrics, and several others, help HE earn a Value grade of B, while IDA has been given a Value grade of D.

HE sticks out from IDA in both our Zacks Rank and Style Scores models, so value investors will likely feel that HE is the better option right now.


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Hawaiian Electric Industries, Inc. (HE) : Free Stock Analysis Report
 
IDACORP, Inc. (IDA) : Free Stock Analysis Report
 
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Zacks Investment Research