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TOT vs. CVX: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Oil and Gas - Integrated - International sector have probably already heard of TOTAL SE and Chevron (CVX - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

TOTAL SE 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 tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

TOT currently has a forward P/E ratio of 10.75, while CVX has a forward P/E of 19.22. We also note that TOT has a PEG ratio of 0.57. 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. CVX currently has a PEG ratio of 3.84.

Another notable valuation metric for TOT is its P/B ratio of 1.11. 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 1.51.

Based on these metrics and many more, TOT holds a Value grade of A, while CVX has a Value grade of C.

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


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