Investors with an interest in Alternative Energy - Other stocks have likely encountered both Clearway Energy (CWENA) and Ormat Technologies (ORA). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Clearway Energy has a Zacks Rank of #2 (Buy), while Ormat Technologies has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CWENA has an improving earnings outlook. But this is only part of the picture 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

CWENA currently has a forward P/E ratio of 18, while ORA has a forward P/E of 32.53. We also note that CWENA has a PEG ratio of 0.45. 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 3.25.

Another notable valuation metric for CWENA is its P/B ratio of 0.96. 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, ORA has a P/B of 1.66.

Based on these metrics and many more, CWENA holds a Value grade of B, while ORA has a Value grade of C.

CWENA stands above ORA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CWENA is the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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