UGP vs. WMB: Which Stock Is the Better Value Option?
Investors looking for stocks in the Oil and Gas - Production and Pipelines sector might want to consider either Ultrapar Participacoes S.A. (UGP) or Williams Companies, Inc. (The) (WMB). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Ultrapar Participacoes S.A. has a Zacks Rank of #1 (Strong Buy), while Williams Companies, Inc. (The) has a Zacks Rank of #3 (Hold) right now. This means that UGP'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.
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.
UGP currently has a forward P/E ratio of 18.50, while WMB has a forward P/E of 19.07. We also note that UGP has a PEG ratio of 3.69. 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. WMB currently has a PEG ratio of 5.45.
Another notable valuation metric for UGP is its P/B ratio of 2.43. 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, WMB has a P/B of 2.94.
Based on these metrics and many more, UGP holds a Value grade of B, while WMB has a Value grade of C.
UGP sticks out from WMB in both our Zacks Rank and Style Scores models, so value investors will likely feel that UGP is the better option right now.
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Ultrapar Participacoes S.A. (UGP) : Free Stock Analysis Report
Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
