We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
MRO vs. COP: Which Stock Should Value Investors Buy Now?
Read MoreHide Full Article
Investors interested in Oil and Gas - Integrated - United States stocks are likely familiar with Marathon Oil (MRO - Free Report) and ConocoPhillips (COP - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Marathon Oil and ConocoPhillips are both sporting a Zacks Rank of # 1 (Strong Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
MRO currently has a forward P/E ratio of 7.92, while COP has a forward P/E of 9.20. We also note that MRO has a PEG ratio of 0.55. 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. COP currently has a PEG ratio of 0.60.
Another notable valuation metric for MRO is its P/B ratio of 1.59. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, COP has a P/B of 2.60.
Based on these metrics and many more, MRO holds a Value grade of B, while COP has a Value grade of C.
Both MRO and COP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MRO is the superior value option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
MRO vs. COP: Which Stock Should Value Investors Buy Now?
Investors interested in Oil and Gas - Integrated - United States stocks are likely familiar with Marathon Oil (MRO - Free Report) and ConocoPhillips (COP - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Marathon Oil and ConocoPhillips are both sporting a Zacks Rank of # 1 (Strong Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
MRO currently has a forward P/E ratio of 7.92, while COP has a forward P/E of 9.20. We also note that MRO has a PEG ratio of 0.55. 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. COP currently has a PEG ratio of 0.60.
Another notable valuation metric for MRO is its P/B ratio of 1.59. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, COP has a P/B of 2.60.
Based on these metrics and many more, MRO holds a Value grade of B, while COP has a Value grade of C.
Both MRO and COP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MRO is the superior value option right now.