Investors with an interest in Oil and Gas - Exploration and Production - United States stocks have likely encountered both Coterra Energy (CTRA) and APA (APA). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Coterra Energy and APA are both sporting a Zacks Rank of # 1 (Strong Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
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.
CTRA currently has a forward P/E ratio of 3.23, while APA has a forward P/E of 7.36. We also note that CTRA has a PEG ratio of 0.06. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. APA currently has a PEG ratio of 0.50.
Another notable valuation metric for CTRA is its P/B ratio of 3.70. 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, APA has a P/B of 137.66.
These are just a few of the metrics contributing to CTRA's Value grade of B and APA's Value grade of C.
Both CTRA and APA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CTRA is the superior value option right now.
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Coterra Energy Inc. (CTRA) : Free Stock Analysis Report
APA Corporation (APA) : Free Stock Analysis Report
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