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BKH vs. PNW: Which Stock Should Value Investors Buy Now?
Investors with an interest in Utility – Electric Power stocks have likely encountered both Black Hills (BKH) and Pinnacle West (PNW). But which of these two companies is the best option for those looking for undervalued stocks? Let’s take a closer look.
Currently, Black Hills has a Zacks Rank of #2 (Buy), while Pinnacle West has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that BKH likely has seen a stronger improvement to its earnings outlook than PNW has recently. However, value investors will care about much more than just this.
BKH currently has a forward P/E ratio of 17.91, while PNW has a forward P/E of 18.73. We also note that BKH has a PEG ratio of 4. 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. PNW currently has a PEG ratio of 4.19.
Another notable valuation metric for BKH is its P/B ratio of 1.70. 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, PNW has a P/B of 1.81.
Based on these metrics and many more, BKH holds a Value grade of B, while PNW has a Value grade of C.
BKH sticks out from PNW in both our Zacks Rank and Style Scores models, so value investors will likely feel that BKH is the better option right now.