CSAN vs. ORA: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Alternative Energy - Other sector have probably already heard of Cosan (CSAN) and Ormat Technologies (ORA). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Cosan is sporting a Zacks Rank of #2 (Buy), while Ormat Technologies 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 CSAN has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CSAN currently has a forward P/E ratio of 13.99, while ORA has a forward P/E of 49.19. We also note that CSAN has a PEG ratio of 0.78. 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 4.92.
Another notable valuation metric for CSAN is its P/B ratio of 1.08. 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 2.45.
These metrics, and several others, help CSAN earn a Value grade of B, while ORA has been given a Value grade of C.
CSAN has seen stronger estimate revision activity and sports more attractive valuation metrics than ORA, so it seems like value investors will conclude that CSAN is the superior option right now.
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Cosan S.A. Sponsored ADR (CSAN) : Free Stock Analysis Report
Ormat Technologies, Inc. (ORA) : Free Stock Analysis Report
