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CEPU vs. TRP: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Alternative Energy - Other sector have probably already heard of Central Puerto S.A. Sponsored ADR (CEPU - Free Report) and TC Energy (TRP - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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, Central Puerto S.A. Sponsored ADR is sporting a Zacks Rank of #2 (Buy), while TC Energy has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that CEPU likely has seen a stronger improvement to its earnings outlook than TRP has recently. 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.

CEPU currently has a forward P/E ratio of 4.33, while TRP has a forward P/E of 12.92. We also note that CEPU has a PEG ratio of 0.12. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TRP currently has a PEG ratio of 3.23.

Another notable valuation metric for CEPU is its P/B ratio of 0.45. 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, TRP has a P/B of 1.70.

These are just a few of the metrics contributing to CEPU's Value grade of A and TRP's Value grade of C.

CEPU stands above TRP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CEPU is the superior value option right now.


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