Investors interested in Utility - Electric Power stocks are likely familiar with AES (AES) and NextEra Energy (NEE). 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, AES is sporting a Zacks Rank of #2 (Buy), while NextEra Energy has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AES has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

AES currently has a forward P/E ratio of 5.90, while NEE has a forward P/E of 19.30. We also note that AES has a PEG ratio of 1.78. 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. NEE currently has a PEG ratio of 2.48.

Another notable valuation metric for AES is its P/B ratio of 1.15. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NEE has a P/B of 2.41.

These are just a few of the metrics contributing to AES's Value grade of A and NEE's Value grade of D.

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

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The AES Corporation (AES) : Free Stock Analysis Report

NextEra Energy, Inc. (NEE) : Free Stock Analysis Report

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

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