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VEOEY or AWK: Which Is the Better Value Stock Right Now?

Investors interested in stocks from the Utility - Water Supply sector have probably already heard of Veolia Environnement SA (VEOEY) and American Water Works (AWK). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Veolia Environnement SA has a Zacks Rank of #2 (Buy), while American Water Works has a Zacks Rank of #3 (Hold). This means that VEOEY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.


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.

VEOEY currently has a forward P/E ratio of 7.09, while AWK has a forward P/E of 24.90. We also note that VEOEY has a PEG ratio of 0.64. 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. AWK currently has a PEG ratio of 3.11.

Another notable valuation metric for VEOEY is its P/B ratio of 1.41. 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, AWK has a P/B of 2.54.

Based on these metrics and many more, VEOEY holds a Value grade of A, while AWK has a Value grade of D.

VEOEY has seen stronger estimate revision activity and sports more attractive valuation metrics than AWK, so it seems like value investors will conclude that VEOEY is the superior option right now.

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American Water Works Company, Inc. (AWK) : Free Stock Analysis Report

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