Yahoo Finance Should Value Investors Buy NRG Energy (NRG) Stock?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One company value investors might notice is NRG Energy (NRG). NRG is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 9.35, which compares to its industry's average of 15.39. Over the last 12 months, NRG's Forward P/E has been as high as 13.06 and as low as 4.45, with a median of 8.31.
We also note that NRG holds a PEG ratio of 0.77. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NRG's PEG compares to its industry's average PEG of 2.19. NRG's PEG has been as high as 1.24 and as low as 0.13, with a median of 0.62, all within the past year.
Investors should also recognize that NRG has a P/B ratio of 1.95. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. NRG's current P/B looks attractive when compared to its industry's average P/B of 2.21. NRG's P/B has been as high as 2.93 and as low as 1.59, with a median of 1.99, over the past year.
Finally, our model also underscores that NRG has a P/CF ratio of 3.51. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 12.69. Within the past 12 months, NRG's P/CF has been as high as 3.75 and as low as 1.72, with a median of 2.57.
RWE AG (RWEOY) may be another strong Utility - Electric Power stock to add to your shortlist. RWEOY is a # 1 (Strong Buy) stock with a Value grade of A.
RWE AG is currently trading with a Forward P/E ratio of 10.58 while its PEG ratio sits at 7.30. Both of the company's metrics compare favorably to its industry's average P/E of 15.39 and average PEG ratio of 2.19.
Over the last 12 months, RWEOY's P/E has been as high as 20.53, as low as 8.72, with a median of 17.49, and its PEG ratio has been as high as 7.30, as low as 2.45, with a median of 3.98.
RWE AG also has a P/B ratio of 2.87 compared to its industry's price-to-book ratio of 2.21. Over the past year, its P/B ratio has been as high as 2.96, as low as 1.14, with a median of 2.32.
These are only a few of the key metrics included in NRG Energy and RWE AG strong Value grade, but they help show that the stocks are likely undervalued right now. When factoring in the strength of its earnings outlook, NRG and RWEOY look like an impressive value stock at the moment.
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NRG Energy, Inc. (NRG) : Free Stock Analysis Report
RWE AG (RWEOY) : Free Stock Analysis Report
