Yahoo Finance COP or WHD: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Oil and Gas - Integrated - United States sector have probably already heard of ConocoPhillips (COP) and Cactus, Inc. (WHD). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, ConocoPhillips has a Zacks Rank of #2 (Buy), while Cactus, Inc. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that COP has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
COP currently has a forward P/E ratio of 13.51, while WHD has a forward P/E of 18.07. We also note that COP has a PEG ratio of 2.70. 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. WHD currently has a PEG ratio of 9.32.
Another notable valuation metric for COP is its P/B ratio of 2.93. 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, WHD has a P/B of 3.71.
These metrics, and several others, help COP earn a Value grade of B, while WHD has been given a Value grade of D.
COP sticks out from WHD in both our Zacks Rank and Style Scores models, so value investors will likely feel that COP is the better option right now.
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ConocoPhillips (COP) : Free Stock Analysis Report
Cactus, Inc. (WHD) : Free Stock Analysis Report
