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Investors interested in stocks from the Oil and Gas - Integrated - International sector have probably already heard of Eni SpA (E) and Fuchs Petrolub SE Unsponsored ADR (FUPBY). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 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, Eni SpA is sporting a Zacks Rank of #2 (Buy), while Fuchs Petrolub SE Unsponsored ADR has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that E is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
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.
E currently has a forward P/E ratio of 7.02, while FUPBY has a forward P/E of 18.45. We also note that E has a PEG ratio of 1.11. 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. FUPBY currently has a PEG ratio of 1.62.
Another notable valuation metric for E is its P/B ratio of 0.92. 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, FUPBY has a P/B of 3.23.
These metrics, and several others, help E earn a Value grade of A, while FUPBY has been given a Value grade of D.
E stands above FUPBY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that E is the superior value option right now.
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Eni SpA (E) : Free Stock Analysis Report