Investors with an interest in Oil and Gas - Exploration and Production - United States stocks have likely encountered both Matador Resources (MTDR) and Apache (APA). 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.
Currently, Matador Resources has a Zacks Rank of #2 (Buy), while Apache 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 MTDR is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
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.
MTDR currently has a forward P/E ratio of 12.32, while APA has a forward P/E of 628.88. We also note that MTDR has a PEG ratio of 1.71. 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. APA currently has a PEG ratio of 104.81.
Another notable valuation metric for MTDR is its P/B ratio of 1.03. 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, APA has a P/B of 1.60.
Based on these metrics and many more, MTDR holds a Value grade of B, while APA has a Value grade of C.
MTDR sticks out from APA in both our Zacks Rank and Style Scores models, so value investors will likely feel that MTDR is the better option right now.
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Matador Resources Company (MTDR) : Free Stock Analysis Report
Apache Corporation (APA) : Free Stock Analysis Report
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