Investors interested in stocks from the Alternative Energy – Other sector have probably already heard of Kolibri Global Energy Inc. (KGEI – Free Report) and Constellation Energy Corporation (CEG – Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Right now, Kolibri Global Energy Inc. is sporting a Zacks Rank of #2 (Buy), while Constellation Energy Corporation 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 KGEI 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.
KGEI currently has a forward P/E ratio of 9.42, while CEG has a forward P/E of 24.49. We also note that KGEI has a PEG ratio of 0.67. 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. CEG currently has a PEG ratio of 1.42.
Another notable valuation metric for KGEI is its P/B ratio of 1.03. 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, CEG has a P/B of 5.41.
These are just a few of the metrics contributing to KGEI’s Value grade of A and CEG’s Value grade of C.
KGEI stands above CEG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KGEI is the superior value option right now.
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