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Is Energy Transfer LP (ET) a Great Value Stock Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Energy Transfer LP (ET). ET is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock holds a P/E ratio of 6.13, while its industry has an average P/E of 9.11. Over the past year, ET's Forward P/E has been as high as 11.13 and as low as 4.50, with a median of 6.62.

Another valuation metric that we should highlight is ET's P/B ratio of 0.77. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. ET's current P/B looks attractive when compared to its industry's average P/B of 1.26. Within the past 52 weeks, ET's P/B has been as high as 0.90 and as low as 0.44, with a median of 0.59.

Finally, we should also recognize that ET has a P/CF ratio of 3.62. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.89. Over the past year, ET's P/CF has been as high as 7.64 and as low as 2.87, with a median of 4.20.

Value investors will likely look at more than just these metrics, but the above data helps show that Energy Transfer LP is likely undervalued currently. And when considering the strength of its earnings outlook, ET sticks out at as one of the market's strongest value stocks.


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