Investors with an interest in Oil and Gas - Exploration and Production - United States stocks have likely encountered both Matador Resources (MTDR) and Pioneer Natural Resources (PXD). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Matador Resources and Pioneer Natural Resources are both sporting a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. 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.
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.
MTDR currently has a forward P/E ratio of 14.93, while PXD has a forward P/E of 22.08. We also note that MTDR has a PEG ratio of 0.64. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PXD currently has a PEG ratio of 1.78.
Another notable valuation metric for MTDR is its P/B ratio of 1.67. 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, PXD has a P/B of 2.21.
These are just a few of the metrics contributing to MTDR's Value grade of B and PXD's Value grade of C.
Both MTDR and PXD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that MTDR is the superior value option right now.
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Matador Resources Company (MTDR): Free Stock Analysis Report
Pioneer Natural Resources Company (PXD): 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
