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PUMP vs. CLB: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
Micron (MU) delivered earnings and revenue surprises of 34.62% and 2.68%, respectively, for the quarter ended May 2019. Do the numbers hold clues to what lies ahead for the stock?

Investors looking for stocks in the Oil and Gas - Field Services sector might want to consider either ProPetro Holding (PUMP) or Core Laboratories (CLB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

ProPetro Holding and Core Laboratories are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PUMP has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PUMP currently has a forward P/E ratio of 9.06, while CLB has a forward P/E of 31.67. We also note that PUMP has a PEG ratio of 0.62. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. CLB currently has a PEG ratio of 2.29.

Another notable valuation metric for PUMP is its P/B ratio of 2.32. 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, CLB has a P/B of 15.01.

These metrics, and several others, help PUMP earn a Value grade of A, while CLB has been given a Value grade of C.

PUMP 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 PUMP is likely the superior value option right now.


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ProPetro Holding Corp. (PUMP) : Free Stock Analysis Report
 
Core Laboratories N.V. (CLB) : Free Stock Analysis Report
 
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