Yahoo Finance CEG vs. ORA: Which Stock Is the Better Value Option?
Investors interested in stocks from the Alternative Energy - Other sector have probably already heard of Constellation Energy Corporation (CEG) and Ormat Technologies (ORA). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Right now, Constellation Energy Corporation is sporting 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 CEG 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 tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
CEG currently has a forward P/E ratio of 24.92, while ORA has a forward P/E of 71.36. We also note that CEG has a PEG ratio of 1.28. 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. ORA currently has a PEG ratio of 6.49.
Another notable valuation metric for CEG is its P/B ratio of 2.17. 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 2.55.
Based on these metrics and many more, CEG holds a Value grade of A, while ORA has a Value grade of C.
CEG 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 CEG is likely the superior value option right now.
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Constellation Energy Corporation (CEG) : Free Stock Analysis Report
Ormat Technologies, Inc. (ORA) : Free Stock Analysis Report
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