Investors looking for stocks in the Oil and Gas - Exploration and Production - United States sector might want to consider either Noble Midstream Partners (NBLX) or Cheniere Energy (LNG). But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Noble Midstream Partners has a Zacks Rank of #2 (Buy), while Cheniere Energy has a Zacks Rank of #3 (Hold) right now. This means that NBLX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
NBLX currently has a forward P/E ratio of 6.47, while LNG has a forward P/E of 77.78. We also note that NBLX has a PEG ratio of 0.50. 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. LNG currently has a PEG ratio of 2.48.
Another notable valuation metric for NBLX is its P/B ratio of 0.69. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, LNG has a P/B of 7.92.
These metrics, and several others, help NBLX earn a Value grade of A, while LNG has been given a 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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