Investors interested in Alternative Energy - Other stocks are likely familiar with Clearway Energy (CWEN) 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Clearway Energy and Ormat Technologies are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CWEN is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
CWEN currently has a forward P/E ratio of 29.18, while ORA has a forward P/E of 41.29. We also note that CWEN has a PEG ratio of 0.76. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. ORA currently has a PEG ratio of 4.13.
Another notable valuation metric for CWEN is its P/B ratio of 1.2. 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, ORA has a P/B of 2.02.
Based on these metrics and many more, CWEN holds a Value grade of B, while ORA has a Value grade of C.
CWEN has seen stronger estimate revision activity and sports more attractive valuation metrics than ORA, so it seems like value investors will conclude that CWEN is the superior option right now.
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Clearway Energy, Inc. (CWEN): 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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