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EPD vs. OKE: Which Stock Is the Better Value Option?
Investors interested in Oil and Gas - Production Pipeline - MLB stocks are likely familiar with Enterprise Products Partners (EPD - Free Report) and Oneok Inc. (OKE - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Enterprise Products Partners has a Zacks Rank of #2 (Buy), while Oneok Inc. has a Zacks Rank of #3 (Hold) right now. This means that EPD'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 also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
EPD currently has a forward P/E ratio of 11.65, while OKE has a forward P/E of 17.08. We also note that EPD has a PEG ratio of 1.38. 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. OKE currently has a PEG ratio of 3.89.
Another notable valuation metric for EPD is its P/B ratio of 2.47. 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, OKE has a P/B of 2.55.
These metrics, and several others, help EPD earn a Value grade of B, while OKE has been given a Value grade of C.
EPD stands above OKE thanks to its solid earnings outlook, and based on these valuation figures, we also feel that EPD is the superior value option right now.