ENLAY or NEE: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either Enel SpA (ENLAY) or NextEra Energy (NEE). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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.
Currently, Enel SpA has a Zacks Rank of #2 (Buy), while NextEra Energy has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ENLAY has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
ENLAY currently has a forward P/E ratio of 10.48, while NEE has a forward P/E of 19.08. We also note that ENLAY has a PEG ratio of 1.47. 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. NEE currently has a PEG ratio of 2.33.
Another notable valuation metric for ENLAY is its P/B ratio of 1.61. 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, NEE has a P/B of 2.17.
These are just a few of the metrics contributing to ENLAY's Value grade of B and NEE's Value grade of D.
ENLAY stands above NEE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ENLAY is the superior value option right now.
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Enel SpA (ENLAY) : Free Stock Analysis Report
NextEra Energy, Inc. (NEE) : Free Stock Analysis Report
