Investors interested in stocks from the Utility - Electric Power sector have probably already heard of Korea Electric Power (KEP) and Unitil (UTL). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Korea Electric Power has a Zacks Rank of #1 (Strong Buy), while Unitil has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KEP is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.
KEP currently has a forward P/E ratio of 12.66, while UTL has a forward P/E of 23.44. We also note that KEP has a PEG ratio of 2.53. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UTL currently has a PEG ratio of 5.10.
Another notable valuation metric for KEP is its P/B ratio of 0.26. 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. By comparison, UTL has a P/B of 2.29.
Based on these metrics and many more, KEP holds a Value grade of B, while UTL has a Value grade of C.
KEP sticks out from UTL in both our Zacks Rank and Style Scores models, so value investors will likely feel that KEP is the better option right now.
Korea Electric Power Corporation (KEP): Free Stock Analysis Report
Unitil Corporation (UTL): Free Stock Analysis Report
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