Back to top

Are Investors Undervaluing NRG Yield (CWEN) Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is NRG Yield (CWEN - Free Report) . CWEN is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 9.36, while its industry has an average P/E of 11.55. Over the past year, CWEN's Forward P/E has been as high as 23.93 and as low as 8.49, with a median of 18.26.

Investors should also note that CWEN holds a PEG ratio of 0.37. 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. CWEN's industry has an average PEG of 0.55 right now. Over the past 52 weeks, CWEN's PEG has been as high as 0.96 and as low as 0.34, with a median of 0.64.

Another notable valuation metric for CWEN is its P/B ratio of 1.48. 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. This stock's P/B looks solid versus its industry's average P/B of 1.53. Over the past 12 months, CWEN's P/B has been as high as 1.70 and as low as 1.33, with a median of 1.53.

Finally, investors should note that CWEN has a P/CF ratio of 3.93. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. CWEN's P/CF compares to its industry's average P/CF of 5.21. Within the past 12 months, CWEN's P/CF has been as high as 5.39 and as low as 3.52, with a median of 4.22.

These figures are just a handful of the metrics value investors tend to look at, but they help show that NRG Yield is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, CWEN feels like a great value stock at the moment.




In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


Clearway Energy, Inc. (CWEN) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in