Investors looking for stocks in the Utility - Electric Power sector might want to consider either Iberdrola S.A. (IBDRY) or NextEra Energy (NEE). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Right now, both Iberdrola S.A. and NextEra Energy are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.

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.

IBDRY currently has a forward P/E ratio of 14.92, while NEE has a forward P/E of 18.52. We also note that IBDRY has a PEG ratio of 1.78. 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. NEE currently has a PEG ratio of 2.38.

Another notable valuation metric for IBDRY is its P/B ratio of 1.30. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NEE has a P/B of 2.31.

Based on these metrics and many more, IBDRY holds a Value grade of B, while NEE has a Value grade of C.

Both IBDRY and NEE are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that IBDRY is the superior value option right now.

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Iberdrola S.A. (IBDRY) : Free Stock Analysis Report

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