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FANG or DVN: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Oil and Gas - Exploration and Production - United States sector have probably already heard of Diamondback Energy (FANG - Free Report) and Devon Energy (DVN - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Diamondback Energy has a Zacks Rank of #2 (Buy), while Devon Energy has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that FANG likely has seen a stronger improvement to its earnings outlook than DVN has recently. However, value investors will care about much more than just this.
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.
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.
FANG currently has a forward P/E ratio of 12.60, while DVN has a forward P/E of 20.75. We also note that FANG has a PEG ratio of 0.57. 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. DVN currently has a PEG ratio of 18.53.
Another notable valuation metric for FANG is its P/B ratio of 1.02. 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, DVN has a P/B of 2.40.
Based on these metrics and many more, FANG holds a Value grade of B, while DVN has a Value grade of C.
FANG stands above DVN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FANG is the superior value option right now.
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FANG or DVN: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Oil and Gas - Exploration and Production - United States sector have probably already heard of Diamondback Energy (FANG - Free Report) and Devon Energy (DVN - 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Diamondback Energy has a Zacks Rank of #2 (Buy), while Devon Energy has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that FANG likely has seen a stronger improvement to its earnings outlook than DVN has recently. However, value investors will care about much more than just this.
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.
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.
FANG currently has a forward P/E ratio of 12.60, while DVN has a forward P/E of 20.75. We also note that FANG has a PEG ratio of 0.57. 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. DVN currently has a PEG ratio of 18.53.
Another notable valuation metric for FANG is its P/B ratio of 1.02. 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, DVN has a P/B of 2.40.
Based on these metrics and many more, FANG holds a Value grade of B, while DVN has a Value grade of C.
FANG stands above DVN thanks to its solid earnings outlook, and based on these valuation figures, we also feel that FANG is the superior value option right now.