Today is Thursday, March 12, 2020, and this is your daily energy stocks roundup. Today we’re looking at the valuations of NACCO Industries (NYSE: NC), Black Stone Minerals LP (NYSE: BSM), and Talos Energy (NYSE: TALO).
NACCO Industries (NYSE: NC)
NACCO Industries (NYSE: NC) is a $204.21 million company today with a one-year return of -19.14%. 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 5.111 is 7.17% higher than the industry average of 4.769. 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.
NACCO Industries’ enterprise-value-to-free-cash-flow (EV/FCF) ratio of 4.202 is 64.30% lower than its industry average of 11.77. 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 NACCO Industries has increased by 95.91% 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.
NACCO Industries has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Black Stone Minerals LP (NYSE: BSM)
Black Stone Minerals LP (NYSE: BSM) is a $1.215 billion company today with a one-year return of -62.55%. 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 6.211 is 20.27% lower than the industry average of 7.79. That’s good.
Black Stone Minerals LP’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 5.714 is 67.20% lower than its industry average of 17.42. That’s good.
The debt-to-equity (D/E) ratio of Black Stone Minerals LP has increased over the last year. That’s not good.
Black Stone Minerals LP has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
Talos Energy (NYSE: TALO)
Talos Energy (NYSE: TALO) is a $502.02 million company today with a one-year return of -66.42%. 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 1.147 is 85.28% lower than the industry average of 7.79. That’s good.
Talos Energy’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 2.22 is 87.26% lower than its industry average of 17.42. That’s good.
The debt-to-equity (D/E) ratio of Talos Energy has decreased by 30.67% over the last year. That’s good.
Talos Energy 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 NACCO Industries (NYSE: NC) is slightly overvalued, Black Stone Minerals LP (NYSE: BSM) is a good value, and Talos Energy (NYSE: TALO) is a great value.
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