Yahoo Finance UGP vs. WMB: Which Stock Is the Better Value Option?
Investors with an interest in Oil and Gas - Production and Pipelines stocks have likely encountered both Ultrapar Participacoes S.A. (UGP) and Williams Companies, Inc. (The) (WMB). 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.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Ultrapar Participacoes S.A. is sporting a Zacks Rank of #1 (Strong Buy), while Williams Companies, Inc. (The) 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.
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.
UGP currently has a forward P/E ratio of 15.88, while WMB has a forward P/E of 20.57. We also note that UGP has a PEG ratio of 3.17. 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. WMB currently has a PEG ratio of 5.88.
Another notable valuation metric for UGP is its P/B ratio of 2.02. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WMB has a P/B of 3.08.
These are just a few of the metrics contributing to UGP's Value grade of A and WMB's Value grade of D.
UGP stands above WMB 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
Williams Companies, Inc. (The) (WMB) : Free Stock Analysis Report
