CSIQ vs. RUN: Which Stock Is the Better Value Option?
Investors interested in Solar stocks are likely familiar with Canadian Solar (CSIQ) and Sunrun (RUN). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 and Sunrun are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that CSIQ is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
CSIQ currently has a forward P/E ratio of 6.81, while RUN has a forward P/E of 9.48. We also note that CSIQ has a PEG ratio of 0.21. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. RUN currently has a PEG ratio of 0.54.
Another notable valuation metric for CSIQ is its P/B ratio of 0.79. 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 0.90.
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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Canadian Solar Inc. (CSIQ) : Free Stock Analysis Report
Sunrun Inc. (RUN) : Free Stock Analysis Report
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