CLR or RRC: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Oil and Gas - Exploration and Production - United States sector have probably already heard of Continental Resources (CLR) and Range Resources (RRC). But which of these two stocks presents investors with the better value opportunity right now? Let's 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.
Currently, both Continental Resources and Range Resources are holding a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
CLR currently has a forward P/E ratio of 4.90, while RRC has a forward P/E of 6.22. We also note that CLR has a PEG ratio of 0.13. 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. RRC currently has a PEG ratio of 0.22.
Another notable valuation metric for CLR is its P/B ratio of 2.58. 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, RRC has a P/B of 5.03.
These metrics, and several others, help CLR earn a Value grade of B, while RRC has been given a Value grade of C.
Both CLR and RRC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CLR is the superior value option right now.
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Continental Resources, Inc. (CLR) : Free Stock Analysis Report
Range Resources Corporation (RRC) : Free Stock Analysis Report
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