Yahoo Finance UGP vs. PBA: Which Stock Is the Better Value Option?
Investors looking for stocks in the Oil and Gas - Production and Pipelines sector might want to consider either Ultrapar Participacoes S.A. (UGP) or Pembina Pipeline (PBA). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Ultrapar Participacoes S.A. is sporting a Zacks Rank of #1 (Strong Buy), while Pembina Pipeline has a Zacks Rank of #3 (Hold). This means that UGP's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
UGP currently has a forward P/E ratio of 9.77, while PBA has a forward P/E of 15.73. We also note that UGP has a PEG ratio of 0.43. 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. PBA currently has a PEG ratio of 5.24.
Another notable valuation metric for UGP is its P/B ratio of 1.20. 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, PBA has a P/B of 1.80.
Based on these metrics and many more, UGP holds a Value grade of A, while PBA has a Value grade of C.
UGP stands above PBA thanks to its solid earnings outlook, and based on these valuation figures, we also feel that UGP is the superior value option right now.
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Ultrapar Participacoes S.A. (UGP) : Free Stock Analysis Report
Pembina Pipeline Corp. (PBA) : Free Stock Analysis Report
