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MTDR or PXD: Which Is the Better Value Stock Right Now?

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Zacks Equity Research
·2 min read
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Investors looking for stocks in the Oil and Gas - Exploration and Production - United States sector might want to consider either Matador Resources (MTDR) or Pioneer Natural Resources (PXD). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Both Matador Resources and Pioneer Natural Resources have a Zacks Rank of # 1 (Strong Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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 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.

MTDR currently has a forward P/E ratio of 11.78, while PXD has a forward P/E of 18.14. We also note that MTDR has a PEG ratio of 0.29. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PXD currently has a PEG ratio of 2.12.

Another notable valuation metric for MTDR is its P/B ratio of 1.13. 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, PXD has a P/B of 1.70.

These metrics, and several others, help MTDR earn a Value grade of B, while PXD has been given a Value grade of D.

Both MTDR and PXD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MTDR is the superior value option right now.


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Matador Resources Company (MTDR) : Free Stock Analysis Report
 
Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
 
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