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CNX vs. FANG: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Oil and Gas - Exploration and Production - United States sector have probably already heard of CNX Resources Corporation. (CNX - Free Report) and Diamondback Energy (FANG - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both CNX Resources Corporation. and Diamondback Energy are sporting a Zacks Rank of # 1 (Strong Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

CNX currently has a forward P/E ratio of 7.57, while FANG has a forward P/E of 9.50. We also note that CNX has a PEG ratio of 0.18. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FANG currently has a PEG ratio of 0.43.

Another notable valuation metric for CNX is its P/B ratio of 0.90. 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, FANG has a P/B of 1.56.

Based on these metrics and many more, CNX holds a Value grade of A, while FANG has a Value grade of D.

Both CNX and FANG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CNX is the superior value option right now.


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CNX Resources Corporation. (CNX) - free report >>

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