TOT vs. XOM: Which Stock Should Value Investors Buy Now?

XOM

Investors interested in Oil and Gas - Integrated - International stocks are likely familiar with TOTAL S.A. and Exxon Mobil (XOM - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

TOTAL S.A. has a Zacks Rank of #2 (Buy), while Exxon Mobil has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TOT has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

TOT currently has a forward P/E ratio of 10.66, while XOM has a forward P/E of 19.68. We also note that TOT has a PEG ratio of 1.10. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. XOM currently has a PEG ratio of 1.32.

Another notable valuation metric for TOT is its P/B ratio of 1.19. 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, XOM has a P/B of 1.72.

These are just a few of the metrics contributing to TOT's Value grade of A and XOM's Value grade of C.

TOT has seen stronger estimate revision activity and sports more attractive valuation metrics than XOM, so it seems like value investors will conclude that TOT is the superior option right now.

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