Today is Wednesday, January 15, 2020, and this is your daily oil stocks roundup. Today we’re looking at the valuations of MPLX LP (NYSE: MPLX), Occidental Petroleum Corporation (NYSE: OXY), and Cameco Corporation (NYSE: CCJ).
MPLX LP (NYSE: MPLX)
MPLX LP (NYSE: MPLX) is a $28.43 billion company today with a one-year return of -17.7%. 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 11.73 is 24.08% lower than the industry average of 15.45. 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.
MPLX LP’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 31.37 is 25.26% lower than its industry average of 41.97. 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 MPLX LP has increased by 7.78% 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.
MPLX LP has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
Occidental Petroleum Corporation (NYSE: OXY)
Occidental Petroleum Corporation (NYSE: OXY) is a $42.12 billion company today with a one-year return of -27.97%. 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 30.82 is 265.86% higher than the industry average of 8.424. That’s not good.
Occidental Petroleum Corporation’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 44.63 is 64.56% higher than its industry average of 27.12. Not a good sign.
The debt-to-equity (D/E) ratio of Occidental Petroleum Corporation has increased by 175.00% over the last year. That’s not good.
Occidental Petroleum Corporation has scored favorably on 0 of our 3 valuation metrics. With this in mind, we believe the stock is very overvalued.
Cameco Corporation (NYSE: CCJ)
Cameco Corporation (NYSE: CCJ) is a $3.479 billion company today with a one-year return of -25.83%. 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 44.54 is 68.54% lower than the industry average of 141.57. That’s good.
Cameco Corporation’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 19.27 is 18.88% higher than its industry average of 16.21. Not a good sign.
The debt-to-equity (D/E) ratio of Cameco Corporation has decreased by 34.30% over the last year. That’s good.
Cameco Corporation 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 MPLX LP (NYSE: MPLX) is a good value, Occidental Petroleum Corporation (NYSE: OXY) is very overvalued, and Cameco Corporation (NYSE: CCJ) is a good value.
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