Today is Monday, January 27, 2020, and this is your daily energy stocks roundup. Today we're looking at the valuations of Arch Coal (NYSE: ARCH), DMC Global (NASDAQ: BOOM), and Dorchester Minerals LP (NASDAQ: DMLP).
Arch Coal (NYSE: ARCH) is a $829.56 million company today with a one-year return of -33.1%. 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 3.027 is 36.99% lower than the industry average of 4.804. 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.
Arch Coal's enterprise-value-to-free-cash-flow (EV/FCF) ratio of 2.634 is 76.03% lower than its industry average of 10.99. 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 Arch Coal has decreased by 5.57% over the last year. That's 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.
Arch Coal has scored favorably on 3 of our 3 valuation metrics. With this in mind, we believe the stock is a great value.
DMC Global (NASDAQ: BOOM) is a $606.34 million company today with a one-year return of 19.03%. 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 11.37 is 54.37% lower than the industry average of 24.92. That's good.
DMC Global's enterprise-value-to-free-cash-flow (EV/FCF) ratio of 41.55 is 170.16% higher than its industry average of 15.38. Not a good sign.
The debt-to-equity (D/E) ratio of DMC Global has decreased by 51.50% over the last year. That's good.
DMC Global has scored favorably on 2 of our 3 valuation metrics. With this in mind, we believe the stock is a good value.
Dorchester Minerals LP (NASDAQ: DMLP) is a $595.11 million company today with a one-year return of -0.91%. 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 10.18 is 25.12% higher than the industry average of 8.136. That's not good.
Dorchester Minerals LP's enterprise-value-to-free-cash-flow (EV/FCF) ratio of 8.203 is 68.89% lower than its industry average of 26.37. That's good.
The debt-to-equity (D/E) ratio of Dorchester Minerals LP has stayed constant over the last year. That's good.
Dorchester Minerals LP 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 Arch Coal (NYSE: ARCH) is a great value, DMC Global (NASDAQ: BOOM) is a good value, and Dorchester Minerals LP (NASDAQ: DMLP) is a good value.
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