Today is Thursday, February 6, 2020, and this is your daily energy stocks roundup. Today we’re looking at the valuations of Dorchester Minerals LP (NASDAQ: DMLP), Comstock Resources (NYSE: CRK), and Flotek Industries (NYSE: FTK).
Dorchester Minerals LP (NASDAQ: DMLP)
Dorchester Minerals LP (NASDAQ: DMLP) is a $580.54 million company today with a one-year return of -2.85%. Let’s look at its price-to-earnings (P/E) ratio, its enterprise-value-to-free-cash-flow (EV/CF) ratio, and its debt-to-equity ratio to gauge whether or not it’s a good investment.
The company’s P/E ratio of 10.02 is 35.26% higher than the industry average of 7.408. That’s not good. A company’s P/E ratio shows its price as a multiple of its earnings per share (EPS). A relatively high P/E ratio is generally an indicator that a company is overvalued.
Dorchester Minerals LP’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 7.898 is 68.10% lower than its industry average of 24.76. That’s good.
A company’s EV/FCF ratio measures its enterprise value (market cap adjusted for cash holdings and debt) against its free cash flow (how much money the company has after all of its cash outflows). A low EV/FCF ratio indicates that a company is performing efficiently, managing its debt well, and maintaining a strong cash position.
The debt-to-equity (D/E) ratio of Dorchester Minerals LP has increased over the last year. That’s not good.
A company’s D/E ratio equals its total liabilities divided by its shareholder equity. It’s a measure of a company’s financial leverage. A declining D/E ratio indicates that a company is decreasing its debt burden over time, while a rising ratio indicates that a company is taking on more debt over time.
Dorchester Minerals LP has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Comstock Resources (NYSE: CRK)
Comstock Resources (NYSE: CRK) is a $1.169 billion company today with a one-year return of -4.4%. Judging by its price-to-earnings (P/E) ratio, its enterprise-value-to-free-cash-flow (EV/CF) ratio, and its debt-to-equity ratio, is it a good investment?
The company’s P/E ratio of 7.688 is 3.78% higher than the industry average of 7.408. That’s not good.
Comstock Resources’ enterprise-value-to-free-cash-flow (EV/FCF) ratio of -868.03 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of Comstock Resources has decreased by 20.55% over the last year. That’s good.
Comstock Resources has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Flotek Industries (NYSE: FTK)
Flotek Industries (NYSE: FTK) is a $108.65 million company today with a one-year return of -31.02%. Is it a good value based on its price-to-earnings (P/E) ratio, its enterprise-value-to-free-cash-flow (EV/CF) ratio, and its debt-to-equity ratio?
The company’s P/E ratio of 6.714 is 54.82% lower than the industry average of 14.86. That’s good.
Flotek Industries’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of -0.1894 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of Flotek Industries has decreased by 100.00% over the last year. That’s good.
Flotek Industries has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
To summarize, we believe Dorchester Minerals LP (NASDAQ: DMLP) is slightly overvalued, Comstock Resources (NYSE: CRK) is slightly overvalued, and Flotek Industries (NYSE: FTK) is a good value.
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