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TOT or CVX: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Oil and Gas - Integrated - International sector might want to consider either TOTAL S.A. or Chevron (CVX - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

TOTAL S.A. has a Zacks Rank of #2 (Buy), while Chevron has a Zacks Rank of #3 (Hold) right now. This means that TOT'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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

TOT currently has a forward P/E ratio of 10.38, while CVX has a forward P/E of 16.62. We also note that TOT has a PEG ratio of 1.17. 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. CVX currently has a PEG ratio of 3.68.

Another notable valuation metric for TOT is its P/B ratio of 1.17. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CVX has a P/B of 1.53.

These metrics, and several others, help TOT earn a Value grade of B, while CVX has been given a Value grade of C.

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


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