Investors interested in stocks from the Oil and Gas - Production Pipeline - MLB sector have probably already heard of Enable Midstream Partners, LP (ENBL - Free Report) and Crestwood Equity Partners LP (CEQP - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Enable Midstream Partners, LP has a Zacks Rank of #2 (Buy), while Crestwood Equity Partners LP has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ENBL is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
ENBL currently has a forward P/E ratio of 19.15, while CEQP has a forward P/E of 398.57. We also note that ENBL has a PEG ratio of 2.58. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CEQP currently has a PEG ratio of 79.71.
Another notable valuation metric for ENBL is its P/B ratio of 1.14. 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, CEQP has a P/B of 1.79.
Based on these metrics and many more, ENBL holds a Value grade of B, while CEQP has a Value grade of C.
ENBL stands above CEQP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ENBL is the superior value option right now.