Investors interested in stocks from the Alternative Energy - Other sector have probably already heard of Kolibri Global Energy Inc. (KGEI) and Ormat Technologies (ORA). 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.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, Kolibri Global Energy Inc. has a Zacks Rank of #2 (Buy), while Ormat Technologies has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that KGEI is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
KGEI currently has a forward P/E ratio of 9.90, while ORA has a forward P/E of 34.64. We also note that KGEI has a PEG ratio of 0.71. 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. ORA currently has a PEG ratio of 3.46.
Another notable valuation metric for KGEI is its P/B ratio of 1.30. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ORA has a P/B of 1.66.
Based on these metrics and many more, KGEI holds a Value grade of A, while ORA has a Value grade of C.
KGEI is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that KGEI is likely the superior value option right now.
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Kolibri Global Energy Inc. (KGEI): Free Stock Analysis Report Ormat Technologies, Inc. (ORA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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