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5 Undervalued Energy Stocks
Posted February 2, 2012
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By Stookle
Price to earnings ratio is the most commonly used investment metric. The assessment of relative changes in PE ratio over the course of time highlights the low and high multiples investors are willing to pay for the current and future earnings of a company. Most investors would like to compare the current PE of the company with its historical averages. Comparing a company's current P/E ratio with benchmarks such as its historical P/E average can help a value investor determine if the stock is cheap, fully valued or overpriced. We identified the top 5 energy stocks trading below or near the average of its yearly low P/E for the last 5 years. These securities are pretty undervalued compared to other securities in this sector.
EOG Resources (EOG): EOG Resources, Inc. and its subsidiaries engage in the exploration, development, production and marketing of natural gas and crude oil primarily in the United States, Canada, the Republic of Trinidad and Tobago, the United Kingdom and the People's Republic of China. The Company has a Return on Assets (ROA) of 0.81% and a Return on Equity (ROE) of 1.59%. The company is trading with a Return on Invested Capital (ROIC) of 1.14%. The company is trading at 27.22 times current earnings multiple. The average of the minimum forward price to earnings multiples over the last 5 years for the company is 29.08 and the average price to earnings multiples in the same period is 44.08.The Stock is expected to grow at 54.11% over the next 5 years. The company is valued at $434.7 using the minimum earnings multiples and $658.9 using the average earnings multiples over the last 5 years. EOG is currently trading at $105.90, raising $7.39 or 7.5% this year. READ FULL ARTICLE HERE
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