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EQNR vs. ORA: Which Stock Is the Better Value Option?

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Investors interested in Alternative Energy - Other stocks are likely familiar with Equinor (EQNR) and Ormat Technologies (ORA). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.

Equinor and Ormat Technologies are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that EQNR likely has seen a stronger improvement to its earnings outlook than ORA has recently. However, value investors will care about much more than just this.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

EQNR currently has a forward P/E ratio of 7.97, while ORA has a forward P/E of 45.75. We also note that EQNR has a PEG ratio of 0.16. 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. ORA currently has a PEG ratio of 3.43.

Another notable valuation metric for EQNR is its P/B ratio of 1.80. 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, ORA has a P/B of 1.93.

These metrics, and several others, help EQNR earn a Value grade of A, while ORA has been given a Value grade of C.

EQNR has seen stronger estimate revision activity and sports more attractive valuation metrics than ORA, so it seems like value investors will conclude that EQNR is the superior option right now.


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Equinor ASA (EQNR) : Free Stock Analysis Report
 
Ormat Technologies, Inc. (ORA) : Free Stock Analysis Report
 
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