Investors with an interest in Utility - Electric Power stocks have likely encountered both E.ON SE (EONGY) and Pinnacle West (PNW). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

E.ON SE and Pinnacle West 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 EONGY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

EONGY currently has a forward P/E ratio of 11.59, while PNW has a forward P/E of 20.35. We also note that EONGY has a PEG ratio of 3.63. 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. PNW currently has a PEG ratio of 3.65.

Another notable valuation metric for EONGY is its P/B ratio of 1.50. 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, PNW has a P/B of 1.53.

Based on these metrics and many more, EONGY holds a Value grade of A, while PNW has a Value grade of C.

EONGY stands above PNW thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EONGY is the superior value option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

E.ON SE (EONGY) : Free Stock Analysis Report

Pinnacle West Capital Corporation (PNW) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research