Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Utilities - Electric industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Utilities - Electric Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

Click the button below to learn more about A+ Investor and subscribe today.

4 Undervalued Utilities - Electric Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Utilities - Electric industry for Wednesday, March 06, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Utilities - Electric industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Alternus Clean Energy Inc’s Value Grade

Value Grade:

Alternus Clean Energy Inc. is a clean energy independent power producer. The Company develops, installs, owns and operates utility scale solar parks in United States of America and Europe. The Company’s portfolio consists of approximately 168 megawatts (MW) in operation across Italy, Poland, Netherlands, Romania and Tennessee in the United States; over 98 MW under construction; and an acquisition pipeline of over one gigawatt (GW). The Company holds over 500-Megawatts peak (MWp) of organic development projects in pre-construction and late-stage development.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Alternus Clean Energy Inc has a Value Score of 100, which is considered to be undervalued.

Alternus Clean Energy Inc’s price-earnings ratio is 2.94 compared to the industry median at 15.87. This means it has a lower share price relative to earnings compared to its peers. This could make Alternus Clean Energy Inc more attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Alternus Clean Energy Inc’s shareholder yield is higher than its industry median ratio of 2.17%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Alternus Clean Energy Inc’s price-to-book ratio is lower than its industry median ratio of 1.47. This could make Alternus Clean Energy Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Alternus Clean Energy Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Alternus Clean Energy Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 15.07. This could make Alternus Clean Energy Inc more attractive because the lower P/FCF ratio indicates that Alternus Clean Energy Inc is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Electriq Power Holdings Inc’s Value Grade

Value Grade:

Electriq Power Holdings, Inc. provides turnkey intelligent energy storage and management solutions for homes and small businesses. The Company’s solutions deliver clean energy, even during intermittent outages and inclement weather. The Company’s solutions enable cities, municipalities, and utilities to provide their constituents with a path to sustainable and resilient sources of energy.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Electriq Power Holdings Inc has a Value Score of 100, which is considered to be undervalued.

Electriq Power Holdings Inc’s price-earnings ratio is 8.4 compared to the industry median at 15.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Electriq Power Holdings Inc more attractive for value investors.

Electriq Power Holdings Inc’s price-to-book ratio is higher than its peers. This could make Electriq Power Holdings Inc less attractive for value investors when compared to the industry median at 1.47.

You can read more about Electriq Power Holdings Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Entergy New Orleans LLC’s Value Grade

Value Grade:

Entergy New Orleans, LLC is an electric and gas utility company. The Company is engaged in the generation, transmission, distribution, and sale of electric power. The Company owns an 870 megawatt (mg) Michoud Plant generating station. Its Michoud Plant located in eastern New Orleans. The Company is also engaged in operating a natural gas distribution business.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Entergy New Orleans LLC has a Value Score of 99, which is considered to be undervalued.

Entergy New Orleans LLC’s price-earnings ratio is 0.9 compared to the industry median at 15.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Entergy New Orleans LLC more attractive for value investors.

Entergy New Orleans LLC’s price-to-book ratio is higher than its peers. This could make Entergy New Orleans LLC less attractive for value investors when compared to the industry median at 1.47.

You can read more about Entergy New Orleans LLC’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Wisconsin Electric Power Company’s Value Grade

Value Grade:

Wisconsin Electric Power Company is a holding company. The Company is primarily engaged in the business of generating and distributing electricity in Wisconsin and the Upper Peninsula of Michigan, and distributing natural gas in Wisconsin. The Company conducts its operations through three segments: electric utility, natural gas utility and steam utility. The electric utility segment is engaged in the generation, distribution, and sale of electricity in southeastern, east central, and northern Wisconsin and the Upper Peninsula of Michigan. The natural gas utility segment is engaged in the purchase, distribution, and sale of natural gas to retail customers and the transportation of customer-owned natural gas in its service areas within southeastern, east central and northern Wisconsin. The steam utility segment produces, distributes and sells steam to space heating and processing customers in metropolitan Milwaukee, Wisconsin.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Wisconsin Electric Power Company has a Value Score of 99, which is considered to be undervalued.

Wisconsin Electric Power Company’s price-earnings ratio is 4.3 compared to the industry median at 15.9. This means that it has a lower price relative to its earnings compared to its peers. This makes Wisconsin Electric Power Company more attractive for value investors.

Wisconsin Electric Power Company’s price-to-book ratio is higher than its peers. This could make Wisconsin Electric Power Company less attractive for value investors when compared to the industry median at 1.47.

You can read more about Wisconsin Electric Power Company’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Utilities - Electric Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Utilities - Electric stocks as well as other industrys.

Choosing Which of the 4 Best Utilities - Electric Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Alternus Clean Energy Inc stock has a Value Grade of A.
• Electriq Power Holdings Inc stock has a Value Grade of A.
• Entergy New Orleans LLC stock has a Value Grade of A.
• Wisconsin Electric Power Company stock has a Value Grade of A.

Now that you have a bit more background about each of the 4 undervalued stocks in the Utilities - Electric industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Utilities - Electric Stocks

Want to learn more about Utilities - Electric stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 4 Undervalued Utilities - Electric Stocks for Wednesday, March 06
• Is SolarMax Technology Inc (SMXT) Stock a Good Investment?
• 4 Undervalued Utilities - Electric Stocks for Tuesday, March 05
• Why MGE Energy Inc’s (MGEE) Stock Is Up 4.53%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.