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SLB or CLB: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Oil and Gas - Field Services sector have probably already heard of Schlumberger (SLB - Free Report) and Core Laboratories (CLB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Schlumberger and Core Laboratories are sporting a Zacks Rank of # 2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.

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.

SLB currently has a forward P/E ratio of 21.88, while CLB has a forward P/E of 30.96. We also note that SLB has a PEG ratio of 0.56. 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. CLB currently has a PEG ratio of 0.76.

Another notable valuation metric for SLB is its P/B ratio of 3.76. 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, CLB has a P/B of 4.47.

These are just a few of the metrics contributing to SLB's Value grade of B and CLB's Value grade of C.

Both SLB and CLB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SLB is the superior value option right now.


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