Investors interested in stocks from the Solar sector have probably already heard of JinkoSolar (JKS) and 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, JinkoSolar is sporting a Zacks Rank of #1 (Strong Buy), while Sunrun has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that JKS likely has seen a stronger improvement to its earnings outlook than RUN has recently. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
JKS currently has a forward P/E ratio of 6.33, while RUN has a forward P/E of 17.73. We also note that JKS has a PEG ratio of 0.32. 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 3.55.
Another notable valuation metric for JKS is its P/B ratio of 0.44. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, RUN has a P/B of 1.47.
Based on these metrics and many more, JKS holds a Value grade of A, while RUN has a Value grade of D.
JKS is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that JKS is likely the superior value option right now.
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JinkoSolar Holding Company Limited (JKS) : Free Stock Analysis Report
Sunrun Inc. (RUN) : Free Stock Analysis Report
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