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Should Value Investors Buy Energy Transfer (ET) Stock?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Energy Transfer (ET - Free Report) is a stock many investors are watching right now. ET is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 12.19 right now. For comparison, its industry sports an average P/E of 12.71. Over the past 52 weeks, ET's Forward P/E has been as high as 14.92 and as low as 9.59, with a median of 12.03.
We also note that ET holds a PEG ratio of 0.57. 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. ET's industry has an average PEG of 0.81 right now. ET's PEG has been as high as 0.64 and as low as 0.37, with a median of 0.52, all within the past year.
We should also highlight that ET has a P/B ratio of 1.43. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.05. Over the past year, ET's P/B has been as high as 1.71 and as low as 1.25, with a median of 1.40.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ET has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.15.
Finally, we should also recognize that ET has a P/CF ratio of 6.04. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ET's current P/CF looks attractive when compared to its industry's average P/CF of 8.40. ET's P/CF has been as high as 7.34 and as low as 5.35, with a median of 6.10, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Energy Transfer is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ET feels like a great value stock at the moment.
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Should Value Investors Buy Energy Transfer (ET) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
Energy Transfer (ET - Free Report) is a stock many investors are watching right now. ET is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with P/E ratio of 12.19 right now. For comparison, its industry sports an average P/E of 12.71. Over the past 52 weeks, ET's Forward P/E has been as high as 14.92 and as low as 9.59, with a median of 12.03.
We also note that ET holds a PEG ratio of 0.57. 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. ET's industry has an average PEG of 0.81 right now. ET's PEG has been as high as 0.64 and as low as 0.37, with a median of 0.52, all within the past year.
We should also highlight that ET has a P/B ratio of 1.43. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.05. Over the past year, ET's P/B has been as high as 1.71 and as low as 1.25, with a median of 1.40.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. ET has a P/S ratio of 0.75. This compares to its industry's average P/S of 1.15.
Finally, we should also recognize that ET has a P/CF ratio of 6.04. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. ET's current P/CF looks attractive when compared to its industry's average P/CF of 8.40. ET's P/CF has been as high as 7.34 and as low as 5.35, with a median of 6.10, all within the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Energy Transfer is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, ET feels like a great value stock at the moment.