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PBR vs. CVX: Which Stock Is the Better Value Option?

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Investors interested in Oil and Gas - Integrated - International stocks are likely familiar with Petrobras (PBR - Free Report) and Chevron (CVX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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.

Both Petrobras and Chevron have a Zacks Rank of #1 (Strong Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.

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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

PBR currently has a forward P/E ratio of 5.76, while CVX has a forward P/E of 17.28. We also note that PBR has a PEG ratio of 0.17. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. CVX currently has a PEG ratio of 1.16.

Another notable valuation metric for PBR is its P/B ratio of 1.78. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CVX has a P/B of 1.96.

These are just a few of the metrics contributing to PBR's Value grade of A and CVX's Value grade of C.

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

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