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CSIQ or RUN: Which Is the Better Value Stock Right Now?

Zacks Equity Research
EHealth (EHTH) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Investors looking for stocks in the Solar sector might want to consider either Canadian Solar (CSIQ) or Sunrun (RUN). 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 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.

Canadian Solar has a Zacks Rank of #1 (Strong Buy), while Sunrun has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that CSIQ likely has seen a stronger improvement to its earnings outlook than RUN has recently. But this is just one factor that value investors are interested in.

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.

CSIQ currently has a forward P/E ratio of 9.91, while RUN has a forward P/E of 15.82. We also note that CSIQ has a PEG ratio of 0.31. 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. RUN currently has a PEG ratio of 0.91.

Another notable valuation metric for CSIQ is its P/B ratio of 1.17. 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, RUN has a P/B of 1.37.

Based on these metrics and many more, CSIQ holds a Value grade of A, while RUN has a Value grade of C.

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


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