Is Energy Transfer LP (ET) a Great Value Stock Right Now?

Zacks Equity Research
·3-min read

The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Energy Transfer LP (ET) is a stock many investors are watching right now. ET is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 9.23. This compares to its industry's average Forward P/E of 11.28. Over the past 52 weeks, ET's Forward P/E has been as high as 11.83 and as low as 3.38, with a median of 9.09.

Another valuation metric that we should highlight is ET's P/B ratio of 0.66. 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. This stock's P/B looks attractive against its industry's average P/B of 1.70. Over the past year, ET's P/B has been as high as 1.24 and as low as 0.35, with a median of 1.

Finally, we should also recognize that ET has a P/CF ratio of 4.09. 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. ET's current P/CF looks attractive when compared to its industry's average P/CF of 7.24. Over the past 52 weeks, ET's P/CF has been as high as 6.87 and as low as 1.77, with a median of 4.96.

These are only a few of the key metrics included in Energy Transfer LP's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, ET looks like an impressive value stock at the moment.

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