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MPC vs. VLO: Which Stock Should Value Investors Buy Now?
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Investors with an interest in Oil and Gas - Refining and Marketing stocks have likely encountered both Marathon Petroleum (MPC - Free Report) and Valero Energy (VLO - 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Marathon Petroleum and Valero Energy have a Zacks Rank of # 1 (Strong Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
MPC currently has a forward P/E ratio of 8.29, while VLO has a forward P/E of 8.70. We also note that MPC has a PEG ratio of 0.42. 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 1.45.
Another notable valuation metric for MPC is its P/B ratio of 2.03. 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 2.90.
These metrics, and several others, help MPC earn a Value grade of B, while VLO has been given a Value grade of C.
Both MPC and VLO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MPC is the superior value option right now.
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MPC vs. VLO: Which Stock Should Value Investors Buy Now?
Investors with an interest in Oil and Gas - Refining and Marketing stocks have likely encountered both Marathon Petroleum (MPC - Free Report) and Valero Energy (VLO - 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Marathon Petroleum and Valero Energy have a Zacks Rank of # 1 (Strong Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
MPC currently has a forward P/E ratio of 8.29, while VLO has a forward P/E of 8.70. We also note that MPC has a PEG ratio of 0.42. 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 1.45.
Another notable valuation metric for MPC is its P/B ratio of 2.03. 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 2.90.
These metrics, and several others, help MPC earn a Value grade of B, while VLO has been given a Value grade of C.
Both MPC and VLO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MPC is the superior value option right now.