May 2, 2024
Top 10 Stock Clearway Energy Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Clearway Energy – Top 10 Stock in SDG 7: Affordable and Clean Energy
Clearway Energy is listed as a top 10 stock on May 02, 2024 in the market index SDG 7 because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 52 (high 52% performer), Obermatt assesses an overall buy recommendation for Clearway Energy on May 02, 2024.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Renewable Electricity |
| Index | Dividends USA, SDG 7, Sound Pay USA |
| Size class | Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Clearway Energy Buy
| 360 METRICS | May 2, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 56 |
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| SENTIMENT | ||||||||
| SENTIMENT | 65 |
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| 360° VIEW | ||||||||
| 360° VIEW | 52 |
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ANALYSIS: With an Obermatt 360° View of 52 (better than 52% compared with alternatives), overall professional sentiment and financial characteristics for the stock Clearway Energy are above average. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for Clearway Energy. The consolidated Sentiment Rank has a good rank of 65, which means that professional investors are more optimistic about the stock than for 65% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 56 or better than 56% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 39, meaning that the share price of Clearway Energy is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 35. ...read more
RECOMMENDATION: With a consolidated 360° View of 52, Clearway Energy is better positioned than 52% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 65) and safe financing practices (Safety Rank of 56), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of Clearway Energỵ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for Clearway Energy positive
ANALYSIS: With an Obermatt Sentiment Rank of 65 (better than 65% compared with alternatives), overall professional sentiment and engagement for the stock Clearway Energy is above average. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Clearway Energy. Analyst Opinions are at a rank of 91 (better than 91% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 50, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 83, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 83% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 10, which means that currently, professional investors hold less stock in this company than in 90% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 65 (more positive than 65% compared with investment alternatives), Clearway Energy has a reputation among professional investors that is above-average compared with that of its competitors. Not having too many professionals invested in Clearway Energy may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in Clearway Energy. ...read more
Value Strategy: Clearway Energy Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 39 (worse than 61% compared with alternatives), Clearway Energy shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Clearway Energy. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 94% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than 89% of comparable companies, indicating a low value concerning Clearway Energy's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 12 which means that the stock price compared with what market professionals expect for future profit levels is higher than 88% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 44 is also low. Compared with invested capital, the stock price is higher than for 56% of comparable investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 39, is a hold recommendation based on Clearway Energy's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Clearway Energy? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Clearway Energy only if they reasonably expect the low current profit levels to be transitory. ...read more
Growth Strategy: Clearway Energy Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 35 (better than 35% compared with alternatives), Clearway Energy shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with three out of four metrics below average for Clearway Energy. While Profit Growth has a good rank of 96, as professionals currently expect the company to grow its profits more than 96% of its competitors, all other growth indicators are below market averages. Sales Growth has a rank of 46, which means that currently professionals expect the company to grow less than 54% of its competitors, while Capital Growth has a rank of 8 and Stock Returns have been below market median, with a rank of 32 (68% of alternative investments were better). ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 35, is a hold recommendation for growth and momentum investors. While revenue growth and capital growth are good growth momentum indicators, profit is less reliable, because profits may increase due to cost-cutting measures which typically indicate negative growth momentum. "You can save a dollar only once" is the saying about such situations. Growth Investors should look at company priorities closely if they are interested in growth, because the increase in profits is not usually an indicator of growth, and stock prices have been below market, too. ...read more
Safety Strategy: Clearway Energy Debt Financing Safety above-average
| SAFETY METRICS | May 2, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 42 |
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| REFINANCING | ||||||||
| REFINANCING | 98 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 4 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 56 |
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ANALYSIS: With an Obermatt Safety Rank of 56 (better than 56% compared with alternatives), the company Clearway Energy has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Clearway Energy is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Clearway Energy and the other two below average. Refinancing is at 98, meaning the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 98% of its competitors. But Leverage is high with a rank of 42, meaning the company has an above-average debt-to-equity ratio. It has more debt than 58% of its competitors. Liquidity is also on the riskier side with a rank of 4, meaning the company generates less profit to service its debt than 96% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 56 (better than 56% compared with alternatives), Clearway Energy has a financing structure that is safer than that of its competitors. A good Refinancing Rank means that the problems of the company may not be around the corner. But high Leverage is only good if things go well, and low Liquidity is a signal for caution. The financing signals for Clearway Energy are on the riskier side, requiring the company's future to be on the safer side. Investors may want to look at Growth and Sentiment ranks before making an investment decision. ...read more
Combined financial peformance: Clearway Energy Below-Average Financial Performance
| COMBINED PERFORMANCE | May 2, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 39 |
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| GROWTH | ||||||||
| GROWTH | 35 |
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| SAFETY | ||||||||
| SAFETY | 4 |
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| COMBINED | ||||||||
| COMBINED | 39 |
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ANALYSIS: With an Obermatt Combined Rank of 39 (worse than 61% compared with investment alternatives), Clearway Energy (Renewable Electricity, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Clearway Energy are low in value (priced high) with a consolidated Value Rank of 39 (worse than 61% of alternatives) and show below-average growth (Growth Rank of 35) but are safely financed (Safety Rank of 56), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 39, is a hold recommendation based on Clearway Energy's financial characteristics. As the company Clearway Energy's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 39) and low growth (Obermatt Growth Rank of 35), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 56) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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