Investors looking for stocks in the Utility - Electric Power sector might want to consider either Exelon (EXC) or WEC Energy Group (WEC). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. 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.

Right now, both Exelon and WEC Energy Group are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

EXC currently has a forward P/E ratio of 17.31, while WEC has a forward P/E of 20.79. We also note that EXC has a PEG ratio of 3.03. 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. WEC currently has a PEG ratio of 3.06.

Another notable valuation metric for EXC is its P/B ratio of 1.72. 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, WEC has a P/B of 2.70.

These metrics, and several others, help EXC earn a Value grade of B, while WEC has been given a Value grade of D.

Both EXC and WEC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that EXC is the superior value option right now.

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Exelon Corporation (EXC) : Free Stock Analysis Report

WEC Energy Group, Inc. (WEC) : Free Stock Analysis Report

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

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