Back to top

Image: Bigstock

BP vs. FUPBY: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors interested in stocks from the Oil and Gas - Integrated - International sector have probably already heard of BP (BP - Free Report) and Fuchs Petrolub SE Unsponsored ADR (FUPBY - 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, both BP and Fuchs Petrolub SE Unsponsored ADR are sporting a Zacks Rank of # 2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

BP currently has a forward P/E ratio of 3.89, while FUPBY has a forward P/E of 18.83. We also note that BP has a PEG ratio of 0.65. 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. FUPBY currently has a PEG ratio of 1.71.

Another notable valuation metric for BP is its P/B ratio of 1.47. 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, FUPBY has a P/B of 2.38.

These metrics, and several others, help BP earn a Value grade of A, while FUPBY has been given a Value grade of C.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


BP p.l.c. (BP) - free report >>

Fuchs Petrolub SE Unsponsored ADR (FUPBY) - free report >>

Published in