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

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Investors interested in Oil and Gas - Refining and Marketing stocks are likely familiar with World Fuel Services and Valero Energy (VLO - 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 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.

World Fuel Services has a Zacks Rank of #2 (Buy), while Valero Energy has a Zacks Rank of #5 (Strong Sell) right now. This means that INT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

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.

INT currently has a forward P/E ratio of 20.78, while VLO has a forward P/E of 308.63. We also note that INT has a PEG ratio of 4.16. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. VLO currently has a PEG ratio of 56.27.

Another notable valuation metric for INT is its P/B ratio of 1.02. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, VLO has a P/B of 1.36.

These are just a few of the metrics contributing to INT's Value grade of A and VLO's Value grade of C.

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


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