Investors interested in stocks from the Oil and Gas - Exploration and Production - United States sector have probably already heard of Noble Midstream Partners (NBLX) and EOG Resources (EOG). But which of these two companies is the best option for those looking for undervalued stocks? 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Currently, Noble Midstream Partners has a Zacks Rank of #2 (Buy), while EOG Resources has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that NBLX likely has seen a stronger improvement to its earnings outlook than EOG has recently. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
NBLX currently has a forward P/E ratio of 7.81, while EOG has a forward P/E of 18.02. We also note that NBLX has a PEG ratio of 0.80. 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. EOG currently has a PEG ratio of 1.29.
Another notable valuation metric for NBLX is its P/B ratio of 1.07. 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, EOG has a P/B of 2.90.
These are just a few of the metrics contributing to NBLX's Value grade of A and EOG's Value grade of C.
NBLX 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 NBLX is likely the superior value option right now.
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Noble Midstream Partners LP (NBLX) : Free Stock Analysis Report
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