Should Value Investors Buy PBF Energy (PBF) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company to watch right now is PBF Energy (PBF). PBF is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 4.95, which compares to its industry's average of 7.56. Over the past year, PBF's Forward P/E has been as high as 7.08 and as low as 1.56, with a median of 4.51.
Another notable valuation metric for PBF is its P/B ratio of 0.93. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.03. Over the past year, PBF's P/B has been as high as 1.24 and as low as 0.75, with a median of 0.99.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. PBF has a P/S ratio of 0.14. This compares to its industry's average P/S of 0.35.
Finally, investors will want to recognize that PBF has a P/CF ratio of 1.65. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 4.95. Over the past year, PBF's P/CF has been as high as 2.09 and as low as 1.10, with a median of 1.62.
Valero Energy (VLO) may be another strong Oil and Gas - Refining and Marketing stock to add to your shortlist. VLO is a # 2 (Buy) stock with a Value grade of A.
Shares of Valero Energy currently holds a Forward P/E ratio of 6.95, and its PEG ratio is 1.16. In comparison, its industry sports average P/E and PEG ratios of 7.56 and 0.87.
Over the last 12 months, VLO's P/E has been as high as 8.76, as low as 4.41, with a median of 6.29, and its PEG ratio has been as high as 1.46, as low as 0.73, with a median of 1.05.
Additionally, Valero Energy has a P/B ratio of 1.59 while its industry's price-to-book ratio sits at 2.03. For VLO, this valuation metric has been as high as 2.31, as low as 1.39, with a median of 1.82 over the past year.
These are just a handful of the figures considered in PBF Energy and Valero Energy's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PBF and VLO is an impressive value stock right now.
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PBF Energy Inc. (PBF) : Free Stock Analysis Report
Valero Energy Corporation (VLO) : Free Stock Analysis Report
