Today is Monday, January 13, 2020, and this is your daily oil stocks roundup. Today we’re looking at the valuations of CVR Energy (NYSE: CVI), Murphy Oil Corporation (NYSE: MUR), and National Fuel Gas Company (NYSE: NFG).
CVR Energy (NYSE: CVI)
CVR Energy (NYSE: CVI) is a $4.061 billion company today with a one-year return of 8.81%. 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 9.712 is 34.29% lower than the industry average of 14.78. 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.
CVR Energy’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 7.824 is 58.16% lower than its industry average of 18.7. 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 CVR Energy has decreased by 16.26% 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.
CVR Energy has scored favorably on 3 of our 3 valuation metrics. With this in mind, we believe the stock is a great value.
Murphy Oil Corporation (NYSE: MUR)
Murphy Oil Corporation (NYSE: MUR) is a $4.141 billion company today with a one-year return of -1.6%. 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 3.35 is 60.23% lower than the industry average of 8.424. That’s good.
Murphy Oil Corporation’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of -3.706 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of Murphy Oil Corporation has decreased by 19.92% over the last year. That’s good.
Murphy Oil Corporation has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
National Fuel Gas Company (NYSE: NFG)
National Fuel Gas Company (NYSE: NFG) is a $3.896 billion company today with a one-year return of -17.21%. 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 12.93 is 4.61% higher than the industry average of 12.36. That’s not good.
National Fuel Gas Company’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of -64.02 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of National Fuel Gas Company has decreased by 7.00% over the last year. That’s good.
National Fuel Gas Company 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 CVR Energy (NYSE: CVI) is a great value, Murphy Oil Corporation (NYSE: MUR) is a good value, and National Fuel Gas Company (NYSE: NFG) is slightly overvalued.
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