Back to top

Image: Bigstock

REPYY or E: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors with an interest in Oil and Gas - Integrated - International stocks have likely encountered both Repsol SA (REPYY - Free Report) and Eni SpA (E - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Repsol SA and Eni SpA are both sporting a Zacks Rank of # 1 (Strong Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle 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 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.

REPYY currently has a forward P/E ratio of 11.65, while E has a forward P/E of 17.31. We also note that REPYY has a PEG ratio of 0.32. 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. E currently has a PEG ratio of 0.78.

Another notable valuation metric for REPYY is its P/B ratio of 0.77. 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, E has a P/B of 0.99.

Based on these metrics and many more, REPYY holds a Value grade of B, while E has a Value grade of D.

Both REPYY and E are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that REPYY is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Eni SpA (E) - free report >>

Repsol SA (REPYY) - free report >>

Published in