Yahoo Finance CWEN vs. ORA: Which Stock Is the Better Value Option?
Investors looking for stocks in the Alternative Energy - Other sector might want to consider either Clearway Energy (CWEN) or Ormat Technologies (ORA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Clearway Energy and Ormat Technologies are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that CWEN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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 14.68, while ORA has a forward P/E of 64.09. We also note that CWEN has a PEG ratio of 0.83. 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 6.41.
Another notable valuation metric for CWEN is its P/B ratio of 1.59. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ORA has a P/B of 2.43.
Based on these metrics and many more, CWEN holds a Value grade of B, while ORA has a Value grade of D.
CWEN stands above ORA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CWEN is the superior value option right now.
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Clearway Energy, Inc. (CWEN) : Free Stock Analysis Report
Ormat Technologies, Inc. (ORA) : Free Stock Analysis Report
