Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors interested in Oil and Gas - Integrated - International stocks are likely familiar with Exxon Mobil (XOM - Free Report) and Fuchs Petrolub SE Unsponsored ADR (FUPBY - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Exxon Mobil and Fuchs Petrolub SE Unsponsored ADR are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that XOM likely has seen a stronger improvement to its earnings outlook than FUPBY has recently. But this is only part of the picture for value investors.

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.

XOM currently has a forward P/E ratio of 11.50, while FUPBY has a forward P/E of 16.93. We also note that XOM has a PEG ratio of 0.47. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. FUPBY currently has a PEG ratio of 1.33.

Another notable valuation metric for XOM is its P/B ratio of 2.07. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FUPBY has a P/B of 2.55.

Based on these metrics and many more, XOM holds a Value grade of A, while FUPBY has a Value grade of C.

XOM is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that XOM is likely the superior value option right now.


See More Zacks Research for These Tickers


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


Exxon Mobil Corporation (XOM) - free report >>

FUCHS SE - Unsponsored ADR (FUPBY) - free report >>

Published in