Back to top

RRC or CDEV: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Oil and Gas - Exploration and Production - United States stocks are likely familiar with Range Resources (RRC - Free Report) and CENTENNIAL RES (CDEV - 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Range Resources has a Zacks Rank of #2 (Buy), while CENTENNIAL RES 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 RRC 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.

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.

RRC currently has a forward P/E ratio of 14.20, while CDEV has a forward P/E of 23.37. We also note that RRC has a PEG ratio of 0.60. 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. CDEV currently has a PEG ratio of 1.42.

Another notable valuation metric for RRC is its P/B ratio of 0.59. 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, CDEV has a P/B of 0.86.

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

RRC has seen stronger estimate revision activity and sports more attractive valuation metrics than CDEV, so it seems like value investors will conclude that RRC is the superior option right now.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

Range Resources Corporation (RRC) - free report >>

CENTENNIAL RES (CDEV) - free report >>

More from Zacks Tale of the Tape

You May Like

Published in