Today is Monday, April 13, 2020, and this is your daily energy stocks roundup. Today we’re looking at the valuations of Matrix Service Company (NASDAQ: MTRX), Texas Pacific Land Trust (NYSE: TPL), and National Oilwell Varco (NYSE: NOV).
Matrix Service Company (NASDAQ: MTRX)
Matrix Service Company (NASDAQ: MTRX) is a $251.3 million company today with a one-year return of -48.11%. 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 8.3 is 48.29% lower than the industry average of 16.05. 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.
Matrix Service Company’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 4.467 is 53.13% lower than its industry average of 9.531. 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 Matrix Service Company has increased by 4490.00% 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.
Matrix Service Company has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
Texas Pacific Land Trust (NYSE: TPL)
Texas Pacific Land Trust (NYSE: TPL) is a $3.917 billion company today with a one-year return of -39.48%. 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 12.21 is 94.89% higher than the industry average of 6.265. That’s not good.
Texas Pacific Land Trust’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 12.03 is 34.01% lower than its industry average of 18.23. That’s good.
The debt-to-equity (D/E) ratio of Texas Pacific Land Trust has decreased by 100.00% over the last year. That’s good.
Texas Pacific Land Trust has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
National Oilwell Varco (NYSE: NOV)
National Oilwell Varco (NYSE: NOV) is a $4.643 billion company today with a one-year return of -58.62%. 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 16.11 is 0.37% higher than the industry average of 16.05. That’s not good.
National Oilwell Varco’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 11.2 is 17.51% higher than its industry average of 9.531. Not a good sign.
The debt-to-equity (D/E) ratio of National Oilwell Varco has increased by 42.37% over the last year. That’s not good.
National Oilwell Varco has scored favorably on 0 of our 3 valuation metrics. With this in mind, we believe the stock is very overvalued.
To summarize, we believe Matrix Service Company (NASDAQ: MTRX) is a good value, Texas Pacific Land Trust (NYSE: TPL) is a good value, and National Oilwell Varco (NYSE: NOV) is very overvalued.
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