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CWEN or AMRC: Which Is the Better Value Stock Right Now?

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Investors with an interest in Alternative Energy - Other stocks have likely encountered both NRG Yield (CWEN - Free Report) and Ameresco (AMRC - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, NRG Yield is sporting a Zacks Rank of #1 (Strong Buy), while Ameresco 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 CWEN 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 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 12.44, while AMRC has a forward P/E of 17.76. We also note that CWEN has a PEG ratio of 0.49. 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. AMRC currently has a PEG ratio of 1.01.

Another notable valuation metric for CWEN is its P/B ratio of 1.60. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, AMRC has a P/B of 1.64.

Based on these metrics and many more, CWEN holds a Value grade of A, while AMRC has a Value grade of C.

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


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