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ETP vs. CEQP: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Oil and Gas - Production Pipeline - MLB stocks have likely encountered both Energy Transfer Partners, L.P. 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Energy Transfer Partners, L.P. has a Zacks Rank of #2 (Buy), while Crestwood Equity Partners LP has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ETP is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

ETP currently has a forward P/E ratio of 21.97, while CEQP has a forward P/E of 424.04. We also note that ETP has a PEG ratio of 1.58. 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. CEQP currently has a PEG ratio of 84.81.

Another notable valuation metric for ETP is its P/B ratio of 0.81. 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, CEQP has a P/B of 1.77.

These are just a few of the metrics contributing to ETP's Value grade of A and CEQP's Value grade of D.

ETP is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ETP is likely the superior value option right now.




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