We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Are Investors Undervaluing DCP Midstream Partners (DCP) Right Now?
Read MoreHide Full Article
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
DCP Midstream Partners is a stock many investors are watching right now. DCP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.60. This compares to its industry's average Forward P/E of 13.64. DCP's Forward P/E has been as high as 30.57 and as low as 6.94, with a median of 8.81, all within the past year.
Another valuation metric that we should highlight is DCP's P/B ratio of 1.45. 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. DCP's current P/B looks attractive when compared to its industry's average P/B of 1.65. Over the past year, DCP's P/B has been as high as 1.61 and as low as 1.02, with a median of 1.31.
Finally, we should also recognize that DCP has a P/CF ratio of 6.59. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.90. Over the past year, DCP's P/CF has been as high as 13.31 and as low as 4.93, with a median of 8.97.
If you're looking for another solid Oil and Gas - Production and Pipelines value stock, take a look at Ultrapar Participacoes (UGP - Free Report) . UGP is a # 2 (Buy) stock with a Value score of A.
Ultrapar Participacoes is currently trading with a Forward P/E ratio of 11 while its PEG ratio sits at 0.48. Both of the company's metrics compare favorably to its industry's average P/E of 13.64 and average PEG ratio of 1.84.
UGP's Forward P/E has been as high as 18.06 and as low as 8.54, with a median of 11.30. During the same time period, its PEG ratio has been as high as 0.81, as low as 0.36, with a median of 0.49.
Furthermore, Ultrapar Participacoes holds a P/B ratio of 1.55 and its industry's price-to-book ratio is 1.65. UGP's P/B has been as high as 2.16, as low as 1.27, with a median of 1.71 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that DCP Midstream Partners and Ultrapar Participacoes are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DCP and UGP feels like a great value stock at the moment.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Are Investors Undervaluing DCP Midstream Partners (DCP) Right Now?
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, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. 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.
DCP Midstream Partners is a stock many investors are watching right now. DCP is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock has a Forward P/E ratio of 8.60. This compares to its industry's average Forward P/E of 13.64. DCP's Forward P/E has been as high as 30.57 and as low as 6.94, with a median of 8.81, all within the past year.
Another valuation metric that we should highlight is DCP's P/B ratio of 1.45. 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. DCP's current P/B looks attractive when compared to its industry's average P/B of 1.65. Over the past year, DCP's P/B has been as high as 1.61 and as low as 1.02, with a median of 1.31.
Finally, we should also recognize that DCP has a P/CF ratio of 6.59. This metric takes into account a company's operating cash flow and can be used to find stocks that are undervalued based on their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 8.90. Over the past year, DCP's P/CF has been as high as 13.31 and as low as 4.93, with a median of 8.97.
If you're looking for another solid Oil and Gas - Production and Pipelines value stock, take a look at Ultrapar Participacoes (UGP - Free Report) . UGP is a # 2 (Buy) stock with a Value score of A.
Ultrapar Participacoes is currently trading with a Forward P/E ratio of 11 while its PEG ratio sits at 0.48. Both of the company's metrics compare favorably to its industry's average P/E of 13.64 and average PEG ratio of 1.84.
UGP's Forward P/E has been as high as 18.06 and as low as 8.54, with a median of 11.30. During the same time period, its PEG ratio has been as high as 0.81, as low as 0.36, with a median of 0.49.
Furthermore, Ultrapar Participacoes holds a P/B ratio of 1.55 and its industry's price-to-book ratio is 1.65. UGP's P/B has been as high as 2.16, as low as 1.27, with a median of 1.71 over the past 12 months.
These figures are just a handful of the metrics value investors tend to look at, but they help show that DCP Midstream Partners and Ultrapar Participacoes are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DCP and UGP feels like a great value stock at the moment.