Investors looking for stocks in the Alternative Energy - Other sector might want to consider either Excelerate Energy (EE) or GE Vernova (GEV). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Excelerate Energy is sporting a Zacks Rank of #2 (Buy), while GE Vernova has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EE is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
EE currently has a forward P/E ratio of 24.20, while GEV has a forward P/E of 151.55. We also note that EE has a PEG ratio of 2.16. 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. GEV currently has a PEG ratio of 8.42.
Another notable valuation metric for EE is its P/B ratio of 1.71. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, GEV has a P/B of 8.98.
Based on these metrics and many more, EE holds a Value grade of A, while GEV has a Value grade of C.
EE sticks out from GEV in both our Zacks Rank and Style Scores models, so value investors will likely feel that EE is the better option right now.
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