Today is Friday, February 21, 2020, and this is your daily energy stocks roundup. Today we’re looking at the valuations of Alliance Resource Partners LP (NASDAQ: ARLP), CNX Resources Corporation (NYSE: CNX), and VAALCO Energy (NYSE: EGY).
Alliance Resource Partners LP (NASDAQ: ARLP)
Alliance Resource Partners LP (NASDAQ: ARLP) is a $963.29 million company today with a one-year return of -61.09%. 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 2.48 is 48.54% lower than the industry average of 4.819. 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.
Alliance Resource Partners LP’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 8.135 is 34.08% lower than its industry average of 12.34. 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 Alliance Resource Partners LP has increased by 45323.05% 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.
Alliance Resource Partners LP has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
CNX Resources Corporation (NYSE: CNX)
CNX Resources Corporation (NYSE: CNX) is a $1.254 billion company today with a one-year return of -36.51%. 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 5.6 is 30.09% lower than the industry average of 8.01. That’s good.
CNX Resources Corporation’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of -22.56 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of CNX Resources Corporation has increased by 20.54% over the last year. That’s not good.
CNX Resources Corporation has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
VAALCO Energy (NYSE: EGY)
VAALCO Energy (NYSE: EGY) is a $125.53 million company today with a one-year return of -9.72%. 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 11.32 is 41.32% higher than the industry average of 8.01. That’s not good.
VAALCO Energy’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 2.82 is 87.56% lower than its industry average of 22.67. That’s good.
The debt-to-equity (D/E) ratio of VAALCO Energy has held steady over the last year. That’s good.
VAALCO Energy 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 Alliance Resource Partners LP (NASDAQ: ARLP) is a good value, CNX Resources Corporation (NYSE: CNX) is slightly overvalued, and VAALCO Energy (NYSE: EGY) is a good value.
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