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AY vs. BE: Which Stock Is the Better Value Option?

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Investors with an interest in Alternative Energy - Other stocks have likely encountered both Atlantica Sustainable Infrastructure (AY - Free Report) and Bloom Energy (BE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Atlantica Sustainable Infrastructure has a Zacks Rank of #1 (Strong Buy), while Bloom Energy has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AY has an improving earnings outlook. But this is just one piece of the puzzle 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 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.

AY currently has a forward P/E ratio of 37.62, while BE has a forward P/E of 66.71. We also note that AY has a PEG ratio of 1.02. 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. BE currently has a PEG ratio of 2.67.

Another notable valuation metric for AY is its P/B ratio of 1.46. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, BE has a P/B of 4.57.

These are just a few of the metrics contributing to AY's Value grade of B and BE's Value grade of D.

AY stands above BE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AY is the superior value option right now.


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Atlantica Sustainable Infrastructure PLC (AY) - free report >>

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