Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors interested in Alternative Energy - Other stocks are likely familiar with TC Energy (TRP - Free Report) and Ormat Technologies (ORA - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, TC Energy is sporting a Zacks Rank of #2 (Buy), while Ormat Technologies has a Zacks Rank of #3 (Hold). This means that TRP's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

TRP currently has a forward P/E ratio of 16.92, while ORA has a forward P/E of 34.58. We also note that TRP has a PEG ratio of 2.42. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ORA currently has a PEG ratio of 3.14.

Another notable valuation metric for TRP is its P/B ratio of 2.29. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, ORA has a P/B of 2.54.

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

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


In-Depth Zacks Research for the Tickers Above


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


TC Energy Corporation (TRP) - free report >>

Ormat Technologies, Inc. (ORA) - free report >>

Published in