Investors with an interest in Oil and Gas - Refining and Marketing stocks have likely encountered both Marathon Petroleum (MPC) and World Fuel Services (INT). But which of these two stocks presents investors with the better value opportunity right now? 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.
Marathon Petroleum has a Zacks Rank of #2 (Buy), while World Fuel Services has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that MPC has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
MPC currently has a forward P/E ratio of 13.93, while INT has a forward P/E of 17.62. We also note that MPC has a PEG ratio of 1.15. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. INT currently has a PEG ratio of 3.52.
Another notable valuation metric for MPC is its P/B ratio of 0.94. 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, INT has a P/B of 1.54.
Based on these metrics and many more, MPC holds a Value grade of A, while INT has a Value grade of C.
MPC 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 MPC is likely the superior value 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
Marathon Petroleum Corporation (MPC) : Free Stock Analysis Report
World Fuel Services Corporation (INT) : Free Stock Analysis Report
To read this article on Zacks.com click here.