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EOG Resources (EOG) is a Top-Ranked Value Stock: Should You Buy?

Zacks Equity Research
·2-min read

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Different than growth or momentum investors, value-focused investors are all about finding good stocks at good prices, and discovering which companies are trading under what their true value is before the broader market catches on. The Value Style Score utilizes ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to help pick out the most attractive and discounted stocks.

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EOG Resources (EOG)

Headquartered in Houston, TX, EOG Resources Inc. is primarily involved in exploring and producing oil and natural gas. The leading upstream energy player’s operations are spread across the United States, China and Trinidad. For evaluating wells in the prolific oil and gas plays, EOG Resources calculates the rate of return. In other words, the company evaluates profitability of the wells to produce optimum oil and gas volumes while minimizing operating costs.

EOG sits at a Zacks Rank #3 (Hold), holds a Value Style Score of B, and has a VGM Score of A. Compared to the Oil and Gas - Exploration and Production - United States industry's P/E of 4.7X, shares of EOG Resources are trading at a forward P/E of 6.6X. EOG also has a PEG Ratio of 0.2, a Price/Cash Flow ratio of 7.5X, and a Price/Sales ratio of 3.5X.

Many value investors pay close attention to a company's earnings as well. For EOG, nine analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $1.94 to $17.04 per share for 2022. Per share EOG boasts an average earnings surprise of 6.1%.

EOG should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.


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