Back to top

Image: Bigstock

KGEI vs. ORA: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors looking for stocks in the Alternative Energy - Other sector might want to consider either Kolibri Global Energy Inc. (KGEI - Free Report) or Ormat Technologies (ORA - Free Report) . 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 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.

Kolibri Global Energy Inc. and Ormat Technologies are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that KGEI likely has seen a stronger improvement to its earnings outlook than ORA has recently. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

KGEI currently has a forward P/E ratio of 7.45, while ORA has a forward P/E of 47.46. We also note that KGEI has a PEG ratio of 0.75. 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 4.75.

Another notable valuation metric for KGEI is its P/B ratio of 0.92. 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 2.55.

These are just a few of the metrics contributing to KGEI's Value grade of A and ORA's Value grade of D.

KGEI has seen stronger estimate revision activity and sports more attractive valuation metrics than ORA, so it seems like value investors will conclude that KGEI is the superior option right now.

Zacks' 7 Best Strong Buy Stocks (New Research Report)

Valued at $99, click below to receive our just-released report predicting the 7 stocks that will soar highest in the coming month.

Click Here, It's Really Free

Published in