Investors interested in Oil & Gas – Production Pipelines – MLB stocks are likely familiar with Energy Transfer LP (ET) and Oneok Inc. (OKE) But which of these two stocks is currently the better investment for value investors? Let’s take a closer look.
There are many strategies for finding value stocks, but we have found that combining a high Zacks Rank with a strong rating in the Value sector of our Style Scores system produces the best returns. The proven Zacks Rank highlights companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Energy Transfer LP and Oneok Inc. are both currently sporting a Zacks Rank #2 (Buy). Since the Zacks Rank favors companies that have seen positive revisions to analyst estimates, investors can take comfort in knowing these stocks have improving earnings outlooks, but this is only one factor that value investors care about.
Value investors attempt to analyze a variety of traditional figures and metrics to determine whether a company is undervalued at its current share price levels.
The Value category of the Style Scores system looks at several key metrics to identify undervalued companies. These metrics include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help determine a company’s fair value.
ET currently has a forward P/E ratio of 11.22, while OKE has a forward P/E ratio of 16.86. Additionally, ET has a PEG ratio of 0.44. This popular metric is similar to the widely-known P/E ratio, except the PEG ratio also takes into account a company’s expected earnings growth rate. OKE currently has a PEG ratio of 4.47.
Another notable valuation metric for ET is its P/B ratio of 1.45. The P/B ratio compares a stock’s market value to its book value, which is defined as total assets minus total liabilities. In comparison, OKE has a P/B of 3.
Based on these metrics and many more, ET holds a Value Grade of A and OKE holds a Value Grade of C.
While ET and OKE are both great stocks with solid earnings outlooks, we believe ET is the better value choice right now based on these valuation figures.
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Energy Transfer LP (ET) : Free Stock Analysis Report
ONEOK, Inc. (OKE) : Free Stock Analysis Report
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