PRMW vs. AWR: Which Stock Is the Better Value Option?
Investors looking for stocks in the Utility - Water Supply sector might want to consider either Primo (PRMW) or American States Water (AWR). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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, both Primo and American States Water are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
PRMW currently has a forward P/E ratio of 18.43, while AWR has a forward P/E of 23.56. We also note that PRMW has a PEG ratio of 1.43. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. AWR currently has a PEG ratio of 3.74.
Another notable valuation metric for PRMW is its P/B ratio of 2.01. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, AWR has a P/B of 3.38.
These metrics, and several others, help PRMW earn a Value grade of B, while AWR has been given a Value grade of D.
Both PRMW and AWR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PRMW is the superior value option right now.
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Primo Water Corporation (PRMW) : Free Stock Analysis Report
American States Water Company (AWR) : Free Stock Analysis Report
