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Are Investors Undervaluing Enterprise Products Partners (EPD) Right Now?

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.

Enterprise Products Partners (EPD) is a stock many investors are watching right now. EPD is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock has a Forward P/E ratio of 10.23. This compares to its industry's average Forward P/E of 11.67. EPD's Forward P/E has been as high as 11.18 and as low as 9.81, with a median of 10.28, all within the past year.


Finally, investors should note that EPD has a P/CF ratio of 7.81. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. EPD's current P/CF looks attractive when compared to its industry's average P/CF of 8.71. Within the past 12 months, EPD's P/CF has been as high as 8.21 and as low as 7.20, with a median of 7.63.

Value investors will likely look at more than just these metrics, but the above data helps show that Enterprise Products Partners is likely undervalued currently. And when considering the strength of its earnings outlook, EPD sticks out at as one of the market's strongest value stocks.

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