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Is Energy Transfer LP (ET) a Great Value Stock Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Energy Transfer LP (ET - Free Report) . ET is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.58 right now. For comparison, its industry sports an average P/E of 9.83. Over the past 52 weeks, ET's Forward P/E has been as high as 11.13 and as low as 4.50, with a median of 7.27.

We should also highlight that ET has a P/B ratio of 0.86. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.37. Within the past 52 weeks, ET's P/B has been as high as 0.90 and as low as 0.44, with a median of 0.57.

Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. ET has a P/S ratio of 0.65. This compares to its industry's average P/S of 1.83.

Finally, our model also underscores that ET has a P/CF ratio of 4.08. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 6.40. Over the past 52 weeks, ET's P/CF has been as high as 7.64 and as low as 2.87, with a median of 4.20.

Value investors will likely look at more than just these metrics, but the above data helps show that Energy Transfer LP is likely undervalued currently. And when considering the strength of its earnings outlook, ET sticks out at as one of the market's strongest value stocks.


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