PEG Ratio Analysis; Top Five Overpriced Stocks of Utilities Sector – PCG, DUK, NI, D, FE

  on Nov 29,2012 Posted in Finance ,Investment Ideas
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The Price/Earnings to Growth ratio is one of the key valuation tools. It takes around 8 seconds to calculate and this method is easier than calculating a security value by discounted cash flow method.

The PEG Ratio is used to get a superior understanding of whether or not a firm’s security is overpriced, underpriced, or just right.

PEG ratio uses the price to earnings ratio of a company, and evaluates it with that firm’s yearly growth rate. If a company’s security is fairly priced, then company’s P/E Ratio should equal to its yearly growth rate. Earlier we gave overview of top five services sector stocks ahead of SMA 200

In this article we will discuss high PEG ratio holders of utilities sector with average market volume over 2 million. Investors remember that high PEG ratio is not good as stock is considered as overvalued so generally lower PEG ratio is better.

PG&E Corporation (NYSE:PCG) has the market capitalization of 17.37 billion while its P/E ratio was 18.72. The price to earning to growth ratio was recorded as 8.54, which is too high in this sector. The San Francisco based company has net profit margin of 6.16% while its gross profit margin was 28.62%. Shares of the company were lagging behind SMA 20 with -1.42% while SMA 50 with -3.64%.

Price to earnings ratio of Duke Energy Corp (NYSE:DUK) was 19.61 while its PEG ratio was 5.24. The corporation has 704.24 million shares outstanding while it offers EPS of $3.15. The Institutional ownership of the company was 50%. Beta factor, which is used to measure the risk associated with stock, was 0.32. In the liquidity analysis, current ratio was 1.18 while quick ratio was 0.83.

NiSource Inc (NYSE:NI) has market capitalization of 7.38 billion while its Price to earnings ratio was 22.81. The company offered earning per share of 1.04 while its 309.76 million shares were outstanding. The PEG ratio of NI was 4.67 while its P/S ratio was 1.43. The ROE ratio was booked as 5.91% while ROA was 1.51%. The stock volatility for the week was 1.36% while for month was booked as 1.65%.

Dominion Resources, Inc (NYSE:D) offered the $2.07 EPS while its beta factor, which is used to measure risk, was 0.45. In the liquidity analysis, current ratio of the company was booked as 0.71 while debt to equity ratio was 1.71. The corporation has market capitalization of 28.98 billion. The corporation has PEG ratio of 4.30 while price to sale ratio was 2.20. It earned $1.18 billion in previous 12 months.

FirstEnergy Corp (NYSE:FE) has market capitalization of 17.77 billion while its P/E ratio was 16.79. The stock has the institutional ownership of 72% while its Beta was 0.40, beta factor is used as a measure of a stock’s volatility in relation to the market. The PEG ratio of the company was 0.40. The company earned $1.06 billion in previous 12 months on $16.16 billion of revenue.

Disclosure: The views and opinions expressed in this article are exclusively those of the authors who have no stake in any stocks mentioned, and hold no plan to acquire any stake within the next 5 days.



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