Today is Friday, January 24, 2020, and this is your daily oil stocks roundup. Today we're looking at the valuations of Helix Energy Solutions Group (NYSE: HLX), Crestwood Equity Partners LP (NYSE: CEQP), and Tellurian (NASDAQ: TELL).
Helix Energy Solutions Group (NYSE: HLX) is a $1.277 billion company today with a one-year return of 28.63%. 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 35.75 is 38.89% higher than the industry average of 25.74. 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.
Helix Energy Solutions Group's enterprise-value-to-free-cash-flow (EV/FCF) ratio of 169.77 is 555.23% higher than its industry average of 25.91. Not a good sign. 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 high EV/FCF ratio could indicate that a company is performing inefficiently, has too much debt, or is starved for cash.
The debt-to-equity (D/E) ratio of Helix Energy Solutions Group has decreased by 10.31% 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.
Helix Energy Solutions Group has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Crestwood Equity Partners LP (NYSE: CEQP) is a $2.177 billion company today with a one-year return of 0.03%. 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 9.469 is 39.42% lower than the industry average of 15.63. That's good.
Crestwood Equity Partners LP's enterprise-value-to-free-cash-flow (EV/FCF) ratio of -38.78 is below zero. That's not good.
The debt-to-equity (D/E) ratio of Crestwood Equity Partners LP has increased by 46.61% over the last year. That's not good.
Crestwood Equity Partners LP has scored favorably on 1 of our 3 valuation metrics. With this in mind, we believe the stock is slightly overvalued.
Tellurian (NASDAQ: TELL) is a $1.686 billion company today with a one-year return of -6.4%. 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 13.33 is 61.73% higher than the industry average of 8.242. That's not good.
Tellurian's enterprise-value-to-free-cash-flow (EV/FCF) ratio of -11.06 is below zero. That's not good.
The debt-to-equity (D/E) ratio of Tellurian has increased by 275.83% over the last year. That's not good.
Tellurian has scored favorably on 0 of our 3 valuation metrics. With this in mind, we believe the stock is very overvalued.
To summarize, we believe Helix Energy Solutions Group (NYSE: HLX) is slightly overvalued, Crestwood Equity Partners LP (NYSE: CEQP) is slightly overvalued, and Tellurian (NASDAQ: TELL) is very overvalued.
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