MRO or ETRN: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Oil and Gas - Integrated - United States sector might want to consider either Marathon Oil (MRO) or Equitrans Midstream (ETRN). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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, both Marathon Oil and Equitrans Midstream are sporting a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
MRO currently has a forward P/E ratio of 10.18, while ETRN has a forward P/E of 19.28. We also note that MRO has a PEG ratio of 0.52. 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. ETRN currently has a PEG ratio of 1.09.
Another notable valuation metric for MRO is its P/B ratio of 1.50. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ETRN has a P/B of 2.71.
Based on these metrics and many more, MRO holds a Value grade of A, while ETRN has a Value grade of C.
Both MRO and ETRN are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MRO is the superior value option right now.
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Marathon Oil Corporation (MRO) : Free Stock Analysis Report
Equitrans Midstream Corporation (ETRN) : Free Stock Analysis Report
