Today is Thursday, April 23, 2020, and this is your daily energy stocks roundup. Today we’re looking at the valuations of CONSOL Coal Resources LP (NYSE: CCR), ProPetro Holding Corporation (NYSE: PUMP), and Peabody Energy Corporation (NYSE: BTU).
CONSOL Coal Resources LP (NYSE: CCR)
CONSOL Coal Resources LP (NYSE: CCR) is a $144.8 million company today with a one-year return of -70.54%. 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 3.225 is 53.06% lower than the industry average of 6.87. 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.
CONSOL Coal Resources LP’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 7.475 is 59.93% higher than its industry average of 4.674. 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 CONSOL Coal Resources LP has increased by 22.67% 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.
CONSOL Coal Resources LP has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
ProPetro Holding Corporation (NYSE: PUMP)
ProPetro Holding Corporation (NYSE: PUMP) is a $352.18 million company today with a one-year return of -86.64%. 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 1.795 is 88.16% lower than the industry average of 15.16. That’s good.
ProPetro Holding Corporation’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of -22.33 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of ProPetro Holding Corporation has decreased by 37.69% over the last year. That’s good.
ProPetro Holding Corporation has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
Peabody Energy Corporation (NYSE: BTU)
Peabody Energy Corporation (NYSE: BTU) is a $323.41 million company today with a one-year return of -88.33%. 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 8.35 is 21.54% higher than the industry average of 6.87. That’s not good.
Peabody Energy Corporation’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 2.453 is 47.52% lower than its industry average of 4.674. That’s good.
The debt-to-equity (D/E) ratio of Peabody Energy Corporation has increased by 24.57% over the last year. That’s not good.
Peabody Energy 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 CONSOL Coal Resources LP (NYSE: CCR) is slightly overvalued, ProPetro Holding Corporation (NYSE: PUMP) is a good value, and Peabody Energy Corporation (NYSE: BTU) is slightly overvalued.
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