Today is Tuesday, February 18, 2020, and this is your daily energy stocks roundup. Today we’re looking at the valuations of EQT Corporation (NYSE: EQT), HighPoint Resources Corporation (NYSE: HPR), and Clean Energy Fuels Corporation (NASDAQ: CLNE).
EQT Corporation (NYSE: EQT)
EQT Corporation (NYSE: EQT) is a $1.434 billion company today with a one-year return of -70.93%. 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 3.21 is 59.93% lower than the industry average of 8.01. 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.
EQT Corporation’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 253.55 is 1018.44% higher than its industry average of 22.67. 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 EQT Corporation has decreased by 38.80% 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.
EQT Corporation has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
HighPoint Resources Corporation (NYSE: HPR)
HighPoint Resources Corporation (NYSE: HPR) is a $213.68 million company today with a one-year return of -61.65%. 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 1.563 is 80.49% lower than the industry average of 8.01. That’s good.
HighPoint Resources Corporation’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of -4.06 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of HighPoint Resources Corporation has increased by 12.47% over the last year. That’s not good.
HighPoint Resources Corporation has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Clean Energy Fuels Corporation (NASDAQ: CLNE)
Clean Energy Fuels Corporation (NASDAQ: CLNE) is a $567.08 million company today with a one-year return of 51.05%. 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 16.93 is 36.42% higher than the industry average of 12.41. That’s not good.
Clean Energy Fuels Corporation’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of -59.6 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of Clean Energy Fuels Corporation has decreased by 66.04% over the last year. That’s good.
Clean Energy Fuels Corporation has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
To summarize, we believe EQT Corporation (NYSE: EQT) is a good value, HighPoint Resources Corporation (NYSE: HPR) is slightly overvalued, and Clean Energy Fuels Corporation (NASDAQ: CLNE) is slightly overvalued.
Editor’s Note: Looking for a set of energy investments that are always a great value? Our research team tracks a lucrative set of evergreen oil ETFs in a free, continuously updated report. Simply enter your email below to claim your copy.
Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the daily newsletter below.
