Back to top

Image: Bigstock

PBF or NTOIY: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Oil and Gas - Refining and Marketing stocks are likely familiar with PBF Energy (PBF - Free Report) and Neste OYJ - Unsponsored ADR (NTOIY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

PBF Energy has a Zacks Rank of #1 (Strong Buy), while Neste OYJ - Unsponsored ADR has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PBF has an improving earnings outlook. But this is just one factor that value investors are interested in.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

PBF currently has a forward P/E ratio of 3.12, while NTOIY has a forward P/E of 11.58. We also note that PBF has a PEG ratio of 0.06. 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. NTOIY currently has a PEG ratio of 0.21.

Another notable valuation metric for PBF is its P/B ratio of 1.28. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, NTOIY has a P/B of 3.12.

These metrics, and several others, help PBF earn a Value grade of A, while NTOIY has been given a Value grade of C.

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

Published in