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Are Investors Undervaluing Marathon Petroleum (MPC) Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Marathon Petroleum (MPC - Free Report) is a stock many investors are watching right now. MPC is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value.

Another notable valuation metric for MPC is its P/B ratio of 1.57. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.81. MPC's P/B has been as high as 2.03 and as low as 0.91, with a median of 1.35, over the past year.

Finally, our model also underscores that MPC has a P/CF ratio of 3.51. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 5.23. Within the past 12 months, MPC's P/CF has been as high as 4.54 and as low as 2.96, with a median of 3.42.

Another great Oil and Gas - Refining and Marketing stock you could consider is PBF Energy (PBF - Free Report) , which is a # 1 (Strong Buy) stock with a Value Score of A.

PBF Energy also has a P/B ratio of 1.35 compared to its industry's price-to-book ratio of 1.81. Over the past year, its P/B ratio has been as high as 2.09, as low as 0.40, with a median of 0.81.

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


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