Back to top

Image: Bigstock

Are Investors Undervaluing Enterprise Products Partners (EPD) 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.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. 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.

One stock to keep an eye on is Enterprise Products Partners (EPD - Free Report) . EPD is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock holds a P/E ratio of 9.94, while its industry has an average P/E of 11.83. Over the past year, EPD's Forward P/E has been as high as 10.88 and as low as 9.69, with a median of 10.22.

Finally, investors should note that EPD has a P/CF ratio of 7.34. 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 company's current P/CF looks solid when compared to its industry's average P/CF of 7.79. Over the past 52 weeks, EPD's P/CF has been as high as 7.89 and as low as 7.06, with a median of 7.49.

Investors could also keep in mind Energy Transfer (ET - Free Report) , an Oil and Gas - Production Pipeline - MLB stock with a Zacks Rank of # 1 (Strong Buy) and Value grade of A.

Energy Transfer sports a P/B ratio of 1.27 as well; this compares to its industry's price-to-book ratio of 1.85. In the past 52 weeks, ET's P/B has been as high as 1.33, as low as 1.04, with a median of 1.18.

These are just a handful of the figures considered in Enterprise Products Partners and Energy Transfer's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that EPD and ET is an impressive value stock right now.

See More Zacks Research for These Tickers

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

Enterprise Products Partners L.P. (EPD) - free report >>

Energy Transfer LP (ET) - free report >>

Published in