Investors interested in stocks from the Alternative Energy – Other sector have probably already heard of TotalEnergies SE Sponsored ADR (TTE) and Ormat Technologies (ORA). But which of these two stocks presents investors with the better value opportunity right now? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, both TotalEnergies SE Sponsored ADR and Ormat Technologies are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
TTE currently has a forward P/E ratio of 8.80, while ORA has a forward P/E of 46.03. We also note that TTE has a PEG ratio of 0.44. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. ORA currently has a PEG ratio of 3.44.
Another notable valuation metric for TTE is its P/B ratio of 1.21. 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 1.95.
Based on these metrics and many more, TTE holds a Value grade of A, while ORA has a Value grade of D.
Both TTE and ORA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that TTE is the superior value option right now.
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