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WKC or BE: Which Is the Better Value Stock Right Now?

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Investors interested in Alternative Energy - Other stocks are likely familiar with World Kinect (WKC - Free Report) and Bloom Energy (BE - Free Report) . 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, World Kinect is sporting a Zacks Rank of #2 (Buy), while Bloom Energy has a Zacks Rank of #3 (Hold). This means that WKC's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 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.

WKC currently has a forward P/E ratio of 11.98, while BE has a forward P/E of 101.61. We also note that WKC has a PEG ratio of 0.89. 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. BE currently has a PEG ratio of 4.06.

Another notable valuation metric for WKC is its P/B ratio of 0.82. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, BE has a P/B of 6.72.

These metrics, and several others, help WKC earn a Value grade of A, while BE has been given a Value grade of D.

WKC 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 WKC is likely the superior value option right now.


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