Investors looking for stocks in the Alternative Energy - Other sector might want to consider either PNM Resources (TXNM) or Bloom Energy (BE). But which of these two companies is the best option for those looking for undervalued stocks? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, PNM Resources has a Zacks Rank of #2 (Buy), while Bloom Energy has a Zacks Rank of #3 (Hold). This means that TXNM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

TXNM currently has a forward P/E ratio of 18.09, while BE has a forward P/E of 309.20. We also note that TXNM has a PEG ratio of 7.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BE currently has a PEG ratio of 12.37.

Another notable valuation metric for TXNM is its P/B ratio of 1.77. 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, BE has a P/B of 13.67.

Based on these metrics and many more, TXNM holds a Value grade of A, while BE has a Value grade of F.

TXNM sticks out from BE in both our Zacks Rank and Style Scores models, so value investors will likely feel that TXNM is the better option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

TXNM Energy, Inc. (TXNM) : Free Stock Analysis Report

Bloom Energy Corporation (BE) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research