Investors interested in Alternative Energy - Other stocks are likely familiar with Kolibri Global Energy Inc. (KGEI) and Talen Energy Corporation (TLN). 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.
Kolibri Global Energy Inc. has a Zacks Rank of #2 (Buy), while Talen Energy Corporation has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that KGEI has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
KGEI currently has a forward P/E ratio of 10.46, while TLN has a forward P/E of 26.05. We also note that KGEI has a PEG ratio of 0.75. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TLN currently has a PEG ratio of 4.78.
Another notable valuation metric for KGEI is its P/B ratio of 1.53. 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, TLN has a P/B of 7.44.
Based on these metrics and many more, KGEI holds a Value grade of A, while TLN has a Value grade of C.
KGEI sticks out from TLN in both our Zacks Rank and Style Scores models, so value investors will likely feel that KGEI is the better option right now.
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Kolibri Global Energy Inc. (KGEI): Free Stock Analysis Report Talen Energy Corporation (TLN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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