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NFG vs. WHD: Which Stock Should Value Investors Buy Now?

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Investors interested in Oil and Gas - Integrated - United States stocks are likely familiar with National Fuel Gas (NFG - Free Report) and Cactus, Inc. (WHD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

National Fuel Gas and Cactus, Inc. are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. Investors should feel comfortable knowing that NFG likely has seen a stronger improvement to its earnings outlook than WHD has recently. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

NFG currently has a forward P/E ratio of 12.01, while WHD has a forward P/E of 14.86. We also note that NFG has a PEG ratio of 0.59. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WHD currently has a PEG ratio of 5.09.

Another notable valuation metric for NFG is its P/B ratio of 2.63. 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. By comparison, WHD has a P/B of 2.69.

These are just a few of the metrics contributing to NFG's Value grade of B and WHD's Value grade of D.

NFG 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 NFG is likely the superior value option right now.


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