Investors with an interest in Oil and Gas - Refining and Marketing - Master Limited Partnerships stocks have likely encountered both Golar LNG Partners LP (GMLP - Free Report) and Suburban Propane Partners, L.P. (SPH - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Golar LNG Partners LP is sporting a Zacks Rank of #2 (Buy), while Suburban Propane Partners, L.P. has a Zacks Rank of #5 (Strong Sell). This means that GMLP's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
GMLP currently has a forward P/E ratio of 7.60, while SPH has a forward P/E of 15.86. We also note that GMLP has a PEG ratio of 0.95. 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. SPH currently has a PEG ratio of 3.96.
Another notable valuation metric for GMLP is its P/B ratio of 1.19. 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, SPH has a P/B of 3.14.
These metrics, and several others, help GMLP earn a Value grade of A, while SPH has been given a Value grade of D.
GMLP has seen stronger estimate revision activity and sports more attractive valuation metrics than SPH, so it seems like value investors will conclude that GMLP is the superior option right now.