Today is Thursday, February 13, 2020, and this is your daily energy stocks roundup. Today we’re looking at the valuations of DMC Global (NASDAQ: BOOM), Calumet Specialty Products Partners LP (NASDAQ: CLMT), and Denbury Resources (NYSE: DNR).
DMC Global (NASDAQ: BOOM)
DMC Global (NASDAQ: BOOM) is a $568.99 million company today with a one-year return of 15.52%. 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 10.67 is 56.68% lower than the industry average of 24.63. 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.
DMC Global’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 39.26 is 161.91% higher than its industry average of 14.99. Not a good sign. 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 high EV/FCF ratio could indicate that a company is performing inefficiently, has too much debt, or is starved for cash.
The debt-to-equity (D/E) ratio of DMC Global has decreased by 51.50% 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.
DMC Global has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
Calumet Specialty Products Partners LP (NASDAQ: CLMT)
Calumet Specialty Products Partners LP (NASDAQ: CLMT) is a $332.73 million company today with a one-year return of 37.1%. 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 26.81 is 233.25% higher than the industry average of 8.045. That’s not good.
Calumet Specialty Products Partners LP’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 7.169 is 68.60% lower than its industry average of 22.83. That’s good.
The debt-to-equity (D/E) ratio of Calumet Specialty Products Partners LP has increased by 578.95% over the last year. That’s not good.
Calumet Specialty Products Partners LP has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Denbury Resources (NYSE: DNR)
Denbury Resources (NYSE: DNR) is a $468.76 million company today with a one-year return of -47.29%. 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 1.244 is 84.54% lower than the industry average of 8.045. That’s good.
Denbury Resources’ enterprise-value-to-free-cash-flow (EV/FCF) ratio of 22.53 is 1.31% lower than its industry average of 22.83. 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.
To summarize, we believe DMC Global (NASDAQ: BOOM) is a good value, Calumet Specialty Products Partners LP (NASDAQ: CLMT) is slightly overvalued, and Denbury Resources (NYSE: DNR) is a great value.
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