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KGEI vs. LNG: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Oil and Gas - Exploration and Production - United States sector have probably already heard of Kolibri Global Energy Inc. (KGEI - Free Report) and Cheniere Energy (LNG - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Kolibri Global Energy Inc. has a Zacks Rank of #2 (Buy), while Cheniere Energy has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that KGEI has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

KGEI currently has a forward P/E ratio of 8.91, while LNG has a forward P/E of 47.13. We also note that KGEI has a PEG ratio of 0.89. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. LNG currently has a PEG ratio of 3.14.

Another notable valuation metric for KGEI is its P/B ratio of 1.01. 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, LNG has a P/B of 5.33.

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

KGEI has seen stronger estimate revision activity and sports more attractive valuation metrics than LNG, so it seems like value investors will conclude that KGEI is the superior option right now.

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