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EQT or NBL: Which Is the Better Value Stock Right Now?

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Investors interested in Oil and Gas - Exploration and Production - United States stocks are likely familiar with EQT (EQT - Free Report) and Noble Energy . But which of these two stocks presents investors with the better value opportunity right now? 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

EQT and Noble Energy are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EQT is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

EQT currently has a forward P/E ratio of 12.98, while NBL has a forward P/E of 25.58. We also note that EQT has a PEG ratio of 0.87. 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. NBL currently has a PEG ratio of 2.56.

Another notable valuation metric for EQT is its P/B ratio of 0.51. 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, NBL has a P/B of 1.10.

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

EQT sticks out from NBL in both our Zacks Rank and Style Scores models, so value investors will likely feel that EQT is the better option right now.


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