Today is Thursday, January 23, 2020, and this is your daily oil stocks roundup. Today we’re looking at the valuations of Delek (NYSE: DK), Comstock Resources (NYSE: CRK), and Genesis Energy LP (NYSE: GEL).
Delek (NYSE: DK)
Delek (NYSE: DK) is a $2.245 billion company today with a one-year return of -6.24%. 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 5.976 is 58.53% lower than the industry average of 14.41. 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.
Delek’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 8.426 is 53.86% lower than its industry average of 18.26. 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 Delek has increased by 9.33% 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.
Delek has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
Comstock Resources (NYSE: CRK)
Comstock Resources (NYSE: CRK) is a $1.283 billion company today with a one-year return of 16.26%. 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 8.438 is 2.38% higher than the industry average of 8.242. That’s not good.
Comstock Resources’ enterprise-value-to-free-cash-flow (EV/FCF) ratio of -909.42 is below zero. That’s not good.
The debt-to-equity (D/E) ratio of Comstock Resources has decreased by 33.41% over the last year. That’s good.
Comstock Resources has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Genesis Energy LP (NYSE: GEL)
Genesis Energy LP (NYSE: GEL) is a $2.464 billion company today with a one-year return of -2.84%. 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 41.94 is 168.33% higher than the industry average of 15.63. That’s not good.
Genesis Energy LP’s enterprise-value-to-free-cash-flow (EV/FCF) ratio of 22.4 is 46.87% lower than its industry average of 42.16. That’s good.
The debt-to-equity (D/E) ratio of Genesis Energy LP has increased by 10.19% over the last year. That’s not good.
Genesis Energy LP 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 Delek (NYSE: DK) is a good value, Comstock Resources (NYSE: CRK) is slightly overvalued, and Genesis Energy LP (NYSE: GEL) is slightly overvalued.
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