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INT vs. MPC: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Oil and Gas - Refining and Marketing sector might want to consider either World Fuel Services or Marathon Petroleum (MPC - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, World Fuel Services has a Zacks Rank of #2 (Buy), while Marathon Petroleum has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that INT likely has seen a stronger improvement to its earnings outlook than MPC has recently. But this is only part of the picture 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.

INT currently has a forward P/E ratio of 22.55, while MPC has a forward P/E of 57.23. We also note that INT has a PEG ratio of 4.51. 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. MPC currently has a PEG ratio of 7.15.

Another notable valuation metric for INT is its P/B ratio of 1.11. 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, MPC has a P/B of 1.24.

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

INT sticks out from MPC in both our Zacks Rank and Style Scores models, so value investors will likely feel that INT is the better option right now.


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