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KLYCY vs. VET: Which Stock Should Value Investors Buy Now?

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Investors interested in Oil and Gas - Exploration and Production - International stocks are likely familiar with KUNLUN EGY ADR (KLYCY - Free Report) and Vermilion Energy (VET - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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.

KUNLUN EGY ADR and Vermilion Energy are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that KLYCY likely has seen a stronger improvement to its earnings outlook than VET has recently. But this is only part of the picture for value investors.

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.

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.

KLYCY currently has a forward P/E ratio of 8.77, while VET has a forward P/E of 24.50. We also note that KLYCY has a PEG ratio of 0.58. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. VET currently has a PEG ratio of 0.93.

Another notable valuation metric for KLYCY is its P/B ratio of 0.79. 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, VET has a P/B of 1.78.

These metrics, and several others, help KLYCY earn a Value grade of A, while VET has been given a Value grade of C.

KLYCY stands above VET thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KLYCY is the superior value option right now.


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