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CMS or PEG: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Utility - Electric Power sector might want to consider either CMS Energy (CMS - Free Report) or PSEG (PEG - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
CMS Energy and PSEG are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CMS 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
CMS currently has a forward P/E ratio of 18.36, while PEG has a forward P/E of 20.69. We also note that CMS has a PEG ratio of 2.39. 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. PEG currently has a PEG ratio of 2.67.
Another notable valuation metric for CMS is its P/B ratio of 2.34. 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, PEG has a P/B of 2.59.
Based on these metrics and many more, CMS holds a Value grade of B, while PEG has a Value grade of D.
CMS stands above PEG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CMS is the superior value option right now.
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CMS or PEG: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Utility - Electric Power sector might want to consider either CMS Energy (CMS - Free Report) or PSEG (PEG - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
CMS Energy and PSEG are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CMS 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
CMS currently has a forward P/E ratio of 18.36, while PEG has a forward P/E of 20.69. We also note that CMS has a PEG ratio of 2.39. 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. PEG currently has a PEG ratio of 2.67.
Another notable valuation metric for CMS is its P/B ratio of 2.34. 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, PEG has a P/B of 2.59.
Based on these metrics and many more, CMS holds a Value grade of B, while PEG has a Value grade of D.
CMS stands above PEG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CMS is the superior value option right now.