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Should Value Investors Buy Dynagas LNG (DLNG) Stock?

Zacks Equity Research

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

One stock to keep an eye on is Dynagas LNG (DLNG). DLNG is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 10.20 right now. For comparison, its industry sports an average P/E of 17.27. DLNG's Forward P/E has been as high as 24.81 and as low as 7.29, with a median of 14.52, all within the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DLNG has a P/S ratio of 0.42. This compares to its industry's average P/S of 0.67.

These are only a few of the key metrics included in Dynagas LNG's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DLNG looks like an impressive value stock at the moment.


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