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PTR vs. SSL: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Oil and Gas - Integrated - International sector have probably already heard of PetroChina and Sasol (SSL - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Right now, both PetroChina and Sasol are sporting a Zacks Rank of # 1 (Strong Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

PTR currently has a forward P/E ratio of 7.71, while SSL has a forward P/E of 8.24. We also note that PTR has a PEG ratio of 0.19. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SSL currently has a PEG ratio of 0.29.

Another notable valuation metric for PTR is its P/B ratio of 0.35. 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, SSL has a P/B of 0.98.

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

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


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