Today is Tuesday, March 31, 2020, and this is your daily energy stocks roundup. Today we're looking at the valuations of Falcon Minerals Corporation (NASDAQ: FLMN), Brigham Minerals (NYSE: MNRL), and Diamond S Shipping (NYSE: DSSI).
Falcon Minerals Corporation (NASDAQ: FLMN) is a $182.24 million company today with a one-year return of -76.47%. 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 6.839 is 32.80% higher than the industry average of 5.15. That's not good. A company's P/E ratio shows its price as a multiple of its earnings per share (EPS). A relatively high P/E ratio is generally an indicator that a company is overvalued.
Falcon Minerals Corporation's enterprise-value-to-free-cash-flow (EV/FCF) ratio of 10.5 is 23.25% lower than its industry average of 13.68. 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 Falcon Minerals Corporation has increased by 123.57% 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.
Falcon Minerals Corporation has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Brigham Minerals (NYSE: MNRL) is a $456.81 million company today with a one-year return of -59.14%. 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 37.83 is 634.56% higher than the industry average of 5.15. That's not good.
Brigham Minerals' enterprise-value-to-free-cash-flow (EV/FCF) ratio of -2.692 is below zero. That's not good.
The debt-to-equity (D/E) ratio of Brigham Minerals has decreased by 100.00% over the last year. That's good.
Brigham Minerals has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Diamond S Shipping (NYSE: DSSI) is a $463.64 million company today with a one-year return of 15.38%. 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 38.71 is 354.77% higher than the industry average of 8.512. That's not good.
Diamond S Shipping's enterprise-value-to-free-cash-flow (EV/FCF) ratio of -5.385 is below zero. That's not good.
The debt-to-equity (D/E) ratio of Diamond S Shipping has decreased by 6.05% over the last year. That's good.
Diamond S Shipping has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
To summarize, we believe Falcon Minerals Corporation (NASDAQ: FLMN) is slightly overvalued, Brigham Minerals (NYSE: MNRL) is slightly overvalued, and Diamond S Shipping (NYSE: DSSI) is slightly overvalued.
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