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PTR vs. SSL: 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 PetroChina and Sasol (SSL - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

PetroChina and Sasol are both sporting a Zacks Rank of # 1 (Strong Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.

PTR currently has a forward P/E ratio of 8.13, while SSL has a forward P/E of 8.91. We also note that PTR has a PEG ratio of 0.20. 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 0.31.

Another notable valuation metric for PTR is its P/B ratio of 0.37. 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 1.06.

Based on these metrics and many more, PTR holds a Value grade of A, while SSL has 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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