Today is Tuesday, May 19, 2020, and this is your daily energy stocks roundup. Today we're looking at the valuations of Noble Midstream Partners LP (NASDAQ: NBLX), Centennial Resource Development (NASDAQ: CDEV), and Cameco Corporation (NYSE: CCJ).
Noble Midstream Partners LP (NASDAQ: NBLX) is a $666.04 million company today with a one-year return of -77.58%. Let's look at its price-to-earnings (P/E) ratio, its enterprise-value-to-free-cash-flow (EV/CF) ratio, and its debt-to-equity ratio to gauge whether or not it's a good investment.
The company's P/E ratio of 3.136 is 73.33% lower than the industry average of 11.76. That's good. A company's P/E ratio shows its price as a multiple of its earnings per share (EPS). A relatively low P/E ratio is generally an indicator that a company is undervalued.
Noble Midstream Partners LP's enterprise-value-to-free-cash-flow (EV/FCF) ratio of 15.7 is 32.68% lower than its industry average of 23.32. That's good.
A company's EV/FCF ratio measures its enterprise value (market cap adjusted for cash holdings and debt) against its free cash flow (how much money the company has after all of its cash outflows). A low EV/FCF ratio indicates that a company is performing efficiently, managing its debt well, and maintaining a strong cash position.
The debt-to-equity (D/E) ratio of Noble Midstream Partners LP has increased by 177.36% over the last year. That's not good.
A company's D/E ratio equals its total liabilities divided by its shareholder equity. It's a measure of a company's financial leverage. A declining D/E ratio indicates that a company is decreasing its debt burden over time, while a rising ratio indicates that a company is taking on more debt over time.
Noble Midstream Partners LP has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
Centennial Resource Development (NASDAQ: CDEV) is a $265.03 million company today with a one-year return of -90.47%. Judging by its price-to-earnings (P/E) ratio, its enterprise-value-to-free-cash-flow (EV/CF) ratio, and its debt-to-equity ratio, is it a good investment?
The company's P/E ratio of 77 is 708.06% higher than the industry average of 9.529. That's not good.
Centennial Resource Development's enterprise-value-to-free-cash-flow (EV/FCF) ratio of -4.148 is below zero. That's not good.
The debt-to-equity (D/E) ratio of Centennial Resource Development has increased by 44.74% over the last year. That's not good.
Centennial Resource Development has scored favorably on 0 of our 3 valuation metrics. With this in mind, we believe the stock is very overvalued.
Cameco Corporation (NYSE: CCJ) is a $3.879 billion company today with a one-year return of -2.97%. Is it a good value based on its price-to-earnings (P/E) ratio, its enterprise-value-to-free-cash-flow (EV/CF) ratio, and its debt-to-equity ratio?
The company's P/E ratio of 67.52 is 5.99% lower than the industry average of 71.82. That's good.
Cameco Corporation's enterprise-value-to-free-cash-flow (EV/FCF) ratio of 9.104 is 3.69% higher than its industry average of 8.78. Not a good sign.
The debt-to-equity (D/E) ratio of Cameco Corporation has decreased by 32.66% over the last year. That's good.
Cameco Corporation has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
To summarize, we believe Noble Midstream Partners LP (NASDAQ: NBLX) is a good value, Centennial Resource Development (NASDAQ: CDEV) is very overvalued, and Cameco Corporation (NYSE: CCJ) is a good value.
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