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CLR or EOG: Which Is the Better Value Stock Right Now?

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·2 min read
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  • EOG
  • CLR

Investors interested in Oil and Gas - Exploration and Production - United States stocks are likely familiar with Continental Resources (CLR) and EOG Resources (EOG). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Continental Resources has a Zacks Rank of #2 (Buy), while EOG Resources has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CLR has an improving earnings outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CLR currently has a forward P/E ratio of 9.81, while EOG has a forward P/E of 10.08. We also note that CLR has a PEG ratio of 0.35. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. EOG currently has a PEG ratio of 0.49.

Another notable valuation metric for CLR is its P/B ratio of 2.23. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, EOG has a P/B of 2.35.

These metrics, and several others, help CLR earn a Value grade of B, while EOG has been given a Value grade of D.

CLR is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that CLR is likely the superior value option right now.


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EOG Resources, Inc. (EOG) : Free Stock Analysis Report
 
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