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SLB or CLB: Which Is the Better Value Stock Right Now?

·2 min read

Investors looking for stocks in the Oil and Gas - Field Services sector might want to consider either Schlumberger (SLB) or Core Laboratories (CLB). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Schlumberger and Core Laboratories are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that SLB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

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.

SLB currently has a forward P/E ratio of 18.96, while CLB has a forward P/E of 29.26. We also note that SLB has a PEG ratio of 0.49. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CLB currently has a PEG ratio of 0.72.

Another notable valuation metric for SLB is its P/B ratio of 3.25. 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, CLB has a P/B of 4.20.

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

SLB sticks out from CLB in both our Zacks Rank and Style Scores models, so value investors will likely feel that SLB is the better option right now.


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Core Laboratories N.V. (CLB) : Free Stock Analysis Report
 
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