LBRT or SLB: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Oil and Gas - Field Services sector have probably already heard of Liberty Oilfield Services (LBRT) and Schlumberger (SLB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Liberty Oilfield Services is sporting a Zacks Rank of #2 (Buy), while Schlumberger has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LBRT is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
LBRT currently has a forward P/E ratio of 5.76, while SLB has a forward P/E of 17.67. We also note that LBRT has a PEG ratio of 0.68. 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. SLB currently has a PEG ratio of 0.71.
Another notable valuation metric for LBRT is its P/B ratio of 1.74. 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, SLB has a P/B of 3.79.
These are just a few of the metrics contributing to LBRT's Value grade of A and SLB's Value grade of C.
LBRT sticks out from SLB in both our Zacks Rank and Style Scores models, so value investors will likely feel that LBRT is the better option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Liberty Energy Inc. (LBRT) : Free Stock Analysis Report
Schlumberger Limited (SLB) : Free Stock Analysis Report
