CNX vs. EQT: Which Stock Should Value Investors Buy Now?
Investors interested in Oil and Gas - Exploration and Production - United States stocks are likely familiar with CNX Resources Corporation. (CNX) and EQT Corporation (EQT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
CNX Resources Corporation. and EQT Corporation are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CNX has an improving earnings outlook. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CNX currently has a forward P/E ratio of 10.48, while EQT has a forward P/E of 16.54. We also note that CNX has a PEG ratio of 0.51. 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. EQT currently has a PEG ratio of 0.55.
Another notable valuation metric for CNX is its P/B ratio of 1.13. 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, EQT has a P/B of 1.29.
Based on these metrics and many more, CNX holds a Value grade of B, while EQT has a Value grade of C.
CNX 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 CNX is likely the superior value option right now.
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