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MTDR vs. PXD: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

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 offers value investors a better bang for their buck right now? We'll need to take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Matador Resources and Pioneer Natural Resources are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that MTDR's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

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.

MTDR currently has a forward P/E ratio of 34.40, while PXD has a forward P/E of 71.24. We also note that MTDR has a PEG ratio of 0.87. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PXD currently has a PEG ratio of 9.79.

Another notable valuation metric for MTDR is its P/B ratio of 0.93. 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 1.62.

Based on these metrics and many more, MTDR holds a Value grade of A, while PXD has a Value grade of C.

MTDR stands above PXD thanks to its solid earnings outlook, and based on these valuation figures, we also 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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