Today is Friday, February 7, 2020, and this is your daily energy stocks roundup. Today we’re looking at the valuations of BP Prudhoe Bay Royalty Trust (NYSE: BPT), Denbury Resources (NYSE: DNR), and Archrock (NYSE: AROC).
BP Prudhoe Bay Royalty Trust (NYSE: BPT)
BP Prudhoe Bay Royalty Trust (NYSE: BPT) is a $156.86 million company today with a one-year return of -69.58%. 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 2.233 is 82.43% lower than the industry average of 12.71. That’s good. A company’s P/E ratio shows its price as a multiple of its earnings per share (EPS). A relatively low P/E ratio is generally an indicator that a company is undervalued.
BP Prudhoe Bay Royalty Trust’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 0.4844 is 97.23% lower than its industry average of 17.5. 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 BP Prudhoe Bay Royalty Trust has decreased by 100.00% over the last year. That’s 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.
BP Prudhoe Bay Royalty Trust has scored favorably on 3 of our 3 valuation metrics. With this in mind, we believe the stock is a great value.
Denbury Resources (NYSE: DNR)
Denbury Resources (NYSE: DNR) is a $478.43 million company today with a one-year return of -47.21%. 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 1.269 is 82.87% lower than the industry average of 7.408. That’s good.
Denbury Resources’ enterprise-value-to-free-cash-flow (EV/FCF) ratio of 22.76 is 8.08% lower than its industry average of 24.76. That’s good.
The debt-to-equity (D/E) ratio of Denbury Resources has decreased by 36.30% over the last year. That’s good.
Denbury Resources has scored favorably on 3 of our 3 valuation metrics. With this in mind, we believe the stock is a great value.
Archrock (NYSE: AROC)
Archrock (NYSE: AROC) is a $1.243 billion company today with a one-year return of -13.45%. 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 17.04 is 28.82% lower than the industry average of 23.94. That’s good.
Archrock’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of -30.07 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of Archrock has decreased by 5.68% over the last year. That’s good.
Archrock 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 BP Prudhoe Bay Royalty Trust (NYSE: BPT) is a great value, Denbury Resources (NYSE: DNR) is a great value, and Archrock (NYSE: AROC) is a good value.
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