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Investors interested in Oil and Gas - Exploration and Production - United States stocks are likely familiar with California Resources Corporation (CRC) and Range Resources (RRC). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
California Resources Corporation and Range Resources are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CRC likely has seen a stronger improvement to its earnings outlook than RRC has recently. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
CRC currently has a forward P/E ratio of 11.16, while RRC has a forward P/E of 11.68. We also note that CRC has a PEG ratio of 0.95. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RRC currently has a PEG ratio of 4.49.
Another notable valuation metric for CRC is its P/B ratio of 0.88. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RRC has a P/B of 2.34.
These metrics, and several others, help CRC earn a Value grade of B, while RRC has been given a Value grade of C.
CRC 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 CRC is likely the superior value option right now.
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California Resources Corporation (CRC) : Free Stock Analysis Report
Range Resources Corporation (RRC) : Free Stock Analysis Report