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Tap These 5 Bargain Stocks with Impressive EV-to-EBITDA Ratios
Investors often focus on the price-to-earnings (P/E) ratio while looking for attractively priced stocks. Easy to compute and widely recognized, it remains one of the most commonly used valuation metrics for estimating a stock's fair market value. However, despite its widespread use, the P/E ratio comes with certain drawbacks.
Although P/E is the most popular valuation metric, a more complicated multiple called EV-to-EBITDA is often considered a more effective alternative. It provides a clearer picture of a company's valuation and earnings potential by taking a more comprehensive approach. Although P/E considers a firm's equity portion, EV-to-EBITDA captures its total value.
Lifetime Brands, Inc., Cenovus Energy Inc., BP p.l.c., Dollar Tree, Inc. and Plains GP Holdings, L.P. are some stocks with impressive EV-to-EBITDA ratios.
Is EV-to-EBITDA a Better Substitute for P/E?
EV-to-EBITDA is essentially the enterprise value (EV) of a stock divided by its earnings before interest, taxes, depreciation and amortization (EBITDA). EV is the sum of a company's market capitalization, its debt and preferred stock minus cash and cash equivalents. EBITDA, the other component of the multiple, gives a better idea of a company's profitability as it removes the impact of non-cash expenses like depreciation and amortization that reduce net earnings. It is also often used as a proxy for cash flows.
Typically, the lower the EV-to-EBITDA ratio, the more enticing it is. A low EV-to-EBITDA ratio could indicate that a stock is undervalued. Unlike the P/E ratio, EV-to-EBITDA takes debt on a company's balance sheet into account. For this reason, it is typically used to value acquisition targets. The ratio shows the amount of debt that the acquirer has to bear. Stocks flaunting a low EV-to-EBITDA multiple could be seen as attractive takeover candidates.
Another shortcoming of P/E is that it can't be used to value a loss-making firm. A company's earnings are also subject to accounting estimates and management manipulation. On the other hand, EV-to-EBITDA is difficult to manipulate and can also be used to value loss-making but EBITDA-positive companies. EV-to-EBITDA is also a useful tool in measuring the value of firms that are highly leveraged and have a high degree of depreciation. Moreover, it can be used to compare companies with different levels of debt.
EV-to-EBITDA is not devoid of limitations and alone cannot conclusively determine a stock's inherent potential and future performance. The multiple varies across industries and is usually not appropriate when comparing stocks in different industries, given their diverse capital expenditure requirements.
A strategy solely based on EV-to-EBITDA might not yield the desired results. However, you can club it with the other major ratios in your stock-investing toolbox, such as price-to-book (P/B), P/E and price-to-sales (P/S) to screen bargain stocks.
Here are our five picks out of the 15 stocks that passed the screen:
Lifetime Brands is a leading global provider of branded kitchenware, tableware and other products. This Zacks Rank #1 stock has a Value Score of A.
Lifetime Brands has an expected year-over-year earnings growth rate of 156.8% for 2026. The Zacks Consensus Estimate for LCUT's 2026 earnings has moved up 184.9% over the past 60 days.
Cenovus Energy is a leading integrated energy firm with operations comprising marketing the produced oil, natural gas and natural gas liquids. This Zacks Rank #1 stock has a Value Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.
Cenovus Energy has an expected year-over-year earnings growth rate of 131.8% for 2026. The Zacks Consensus Estimate for CVE's 2026 earnings has been revised 11.7% upward over the past 60 days.
BP is an integrated energy company that engages in the oil and gas business globally. This Zacks Rank #1 stock has a Value Score of A.
BP has an expected year-over-year earnings growth rate of 134% for 2026. The consensus estimate for BP's 2026 earnings has moved up 22.5% over the past 60 days.
Dollar Tree is an operator of discount variety stores offering a broad assortment of everyday consumables and discretionary merchandise. This Zacks Rank #2 stock has a Value Score of A.
Dollar Tree has an expected year-over-year earnings growth rate of 36.4% for the current fiscal year. The Zacks Consensus Estimate for DLTR's current fiscal-year earnings has been revised 12% higher over the last 60 days.
Plains GP Holdings, through its subsidiaries, is involved in the transportation, storage, terminalling and marketing of crude oil and refined products. This Zacks Rank #2 stock has a Value Score of A.
Plains GP Holdings has an expected year-over-year earnings growth rate of 240% for 2026. The consensus estimate for PAGP's 2026 earnings has been revised 148.3% upward over the past 60 days.
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.
View the Zacks #1 Rank List
Image: Bigstock
Zacks.com featured highlights include Lifetime Brands, Cenovus Energy, BP, Dollar Tree and Plains GP
For Immediate Release
Chicago, IL – October 2, 2026 – Stocks in this week’s article are Lifetime Brands, Inc. (LCUT - Free Report) , Cenovus Energy Inc. (CVE - Free Report) , BP p.l.c. (BP - Free Report) , Dollar Tree, Inc. (DLTR - Free Report) and Plains GP Holdings, L.P. (PAGP - Free Report) .
Tap These 5 Bargain Stocks with Impressive EV-to-EBITDA Ratios
Investors often focus on the price-to-earnings (P/E) ratio while looking for attractively priced stocks. Easy to compute and widely recognized, it remains one of the most commonly used valuation metrics for estimating a stock's fair market value. However, despite its widespread use, the P/E ratio comes with certain drawbacks.
Although P/E is the most popular valuation metric, a more complicated multiple called EV-to-EBITDA is often considered a more effective alternative. It provides a clearer picture of a company's valuation and earnings potential by taking a more comprehensive approach. Although P/E considers a firm's equity portion, EV-to-EBITDA captures its total value.
Lifetime Brands, Inc., Cenovus Energy Inc., BP p.l.c., Dollar Tree, Inc. and Plains GP Holdings, L.P. are some stocks with impressive EV-to-EBITDA ratios.
Is EV-to-EBITDA a Better Substitute for P/E?
EV-to-EBITDA is essentially the enterprise value (EV) of a stock divided by its earnings before interest, taxes, depreciation and amortization (EBITDA). EV is the sum of a company's market capitalization, its debt and preferred stock minus cash and cash equivalents. EBITDA, the other component of the multiple, gives a better idea of a company's profitability as it removes the impact of non-cash expenses like depreciation and amortization that reduce net earnings. It is also often used as a proxy for cash flows.
Typically, the lower the EV-to-EBITDA ratio, the more enticing it is. A low EV-to-EBITDA ratio could indicate that a stock is undervalued. Unlike the P/E ratio, EV-to-EBITDA takes debt on a company's balance sheet into account. For this reason, it is typically used to value acquisition targets. The ratio shows the amount of debt that the acquirer has to bear. Stocks flaunting a low EV-to-EBITDA multiple could be seen as attractive takeover candidates.
Another shortcoming of P/E is that it can't be used to value a loss-making firm. A company's earnings are also subject to accounting estimates and management manipulation. On the other hand, EV-to-EBITDA is difficult to manipulate and can also be used to value loss-making but EBITDA-positive companies. EV-to-EBITDA is also a useful tool in measuring the value of firms that are highly leveraged and have a high degree of depreciation. Moreover, it can be used to compare companies with different levels of debt.
EV-to-EBITDA is not devoid of limitations and alone cannot conclusively determine a stock's inherent potential and future performance. The multiple varies across industries and is usually not appropriate when comparing stocks in different industries, given their diverse capital expenditure requirements.
A strategy solely based on EV-to-EBITDA might not yield the desired results. However, you can club it with the other major ratios in your stock-investing toolbox, such as price-to-book (P/B), P/E and price-to-sales (P/S) to screen bargain stocks.
Here are our five picks out of the 15 stocks that passed the screen:
Lifetime Brands is a leading global provider of branded kitchenware, tableware and other products. This Zacks Rank #1 stock has a Value Score of A.
Lifetime Brands has an expected year-over-year earnings growth rate of 156.8% for 2026. The Zacks Consensus Estimate for LCUT's 2026 earnings has moved up 184.9% over the past 60 days.
Cenovus Energy is a leading integrated energy firm with operations comprising marketing the produced oil, natural gas and natural gas liquids. This Zacks Rank #1 stock has a Value Score of A. You can see the complete list of today's Zacks #1 Rank stocks here.
Cenovus Energy has an expected year-over-year earnings growth rate of 131.8% for 2026. The Zacks Consensus Estimate for CVE's 2026 earnings has been revised 11.7% upward over the past 60 days.
BP is an integrated energy company that engages in the oil and gas business globally. This Zacks Rank #1 stock has a Value Score of A.
BP has an expected year-over-year earnings growth rate of 134% for 2026. The consensus estimate for BP's 2026 earnings has moved up 22.5% over the past 60 days.
Dollar Tree is an operator of discount variety stores offering a broad assortment of everyday consumables and discretionary merchandise. This Zacks Rank #2 stock has a Value Score of A.
Dollar Tree has an expected year-over-year earnings growth rate of 36.4% for the current fiscal year. The Zacks Consensus Estimate for DLTR's current fiscal-year earnings has been revised 12% higher over the last 60 days.
Plains GP Holdings, through its subsidiaries, is involved in the transportation, storage, terminalling and marketing of crude oil and refined products. This Zacks Rank #2 stock has a Value Score of A.
Plains GP Holdings has an expected year-over-year earnings growth rate of 240% for 2026. The consensus estimate for PAGP's 2026 earnings has been revised 148.3% upward over the past 60 days.
For the rest of this Screen of the Week article please visit Zacks.com at: https://www.zacks.com/stock/news/2998770/tap-these-5-bargain-stocks-with-impressive-ev-to-ebitda-ratios
Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
About Screen of the Week
Zacks.com created the first and best screening system on the web earning the distinction as the "#1 site for screening stocks" by Money Magazine. But powerful screening tools is just the start. That is why Zacks created the Screen of the Week to highlight profitable stock picking strategies that investors can actively use.
Strong Stocks that Should Be in the News
Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has more than doubled the market from 1988 through 2016. Its average gain has been a stellar +25% per year. See these high-potential stocks free >>.
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Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.
Contact: Jim Giaquinto
Company: Zacks.com
Phone: 312-265-9268
Email: pr@zacks.com
Visit: https://www.zacks.com/
Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performancefor information about the performance numbers displayed in this press release.