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 Cheniere Energy (LNG). 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.
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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Noble Midstream Partners has a Zacks Rank of #2 (Buy), while Cheniere Energy 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 LNG has recently. But this is just one piece of the puzzle for value investors.
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.
NBLX currently has a forward P/E ratio of 6.55, while LNG has a forward P/E of 61.90. We also note that NBLX has a PEG ratio of 0.50. 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. LNG currently has a PEG ratio of 1.97.
Another notable valuation metric for NBLX is its P/B ratio of 0.69. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, LNG has a P/B of 8.
Based on these metrics and many more, NBLX holds a Value grade of A, while LNG has a Value grade of C.
NBLX sticks out from LNG in both our Zacks Rank and Style Scores models, so value investors will likely feel that NBLX is the better option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Noble Midstream Partners LP (NBLX) : Free Stock Analysis Report
Cheniere Energy, Inc. (LNG) : Free Stock Analysis Report
To read this article on Zacks.com click here.