DVN or CLR: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Oil and Gas - Exploration and Production - United States sector might want to consider either Devon Energy (DVN) or Continental Resources (CLR). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Devon Energy is sporting a Zacks Rank of #2 (Buy), while Continental Resources has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DVN 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 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.
DVN currently has a forward P/E ratio of 20.48, while CLR has a forward P/E of 22.15. We also note that DVN has a PEG ratio of 1.27. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CLR currently has a PEG ratio of 1.35.
Another notable valuation metric for DVN is its P/B ratio of 1.79. 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, CLR has a P/B of 3.03.
These are just a few of the metrics contributing to DVN's Value grade of B and CLR's Value grade of C.
DVN stands above CLR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DVN is the superior value option right now.
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Devon Energy Corporation (DVN): Free Stock Analysis Report
Continental Resources, Inc. (CLR): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.