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AR or APA: Which Is the Better Value Stock Right Now?

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Investors interested in stocks from the Oil and Gas - Exploration and Production - United States sector have probably already heard of Antero Resources (AR - Free Report) and Apache (APA - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Right now, Antero Resources is sporting a Zacks Rank of #1 (Strong Buy), while Apache has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that AR likely has seen a stronger improvement to its earnings outlook than APA has recently. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

AR currently has a forward P/E ratio of 23.64, while APA has a forward P/E of 45.61. We also note that AR has a PEG ratio of 1.18. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. APA currently has a PEG ratio of 6.52.

Another notable valuation metric for AR is its P/B ratio of 0.32. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, APA has a P/B of 1.54.

Based on these metrics and many more, AR holds a Value grade of A, while APA has a Value grade of C.

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


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