Offset High Pump Prices With Exxon Mobil Corporation (XOM) and Chevron Corporation (CVX)

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Finding Cheap Oil and Gas Stocks

Consider the following price multiples:

Ticker Company P/E P/S P/B D/E
XOM Exxon Mobil (NYSE:XOM) 9.22 0.83 2.44 0
CVX Chevron 8.7 0.94 1.71 0
COP ConocoPhillips 9.92 1.15 1.5 0
CHK Chesapeake Energy NA 1.18 0.88 1.06
EPD Enterprise Products Partners 21.07 1.22 3.93 0
SU Suncor Energy 18.06 1.26 1.24 0.28
TLM Talisman Energy 96.38 1.77 1.3 0.45
APA Apache 12.37 1.78 1.03 0.38
NXY Nexen 38.62 2.18 1.65 0.48
CNQ Canadian Natural Resources 14.35 2.23 1.4 0.35
ECA Encana NA 2.24 2.44 1.39
DVN Devon Energy 35.01 2.58 1.13 0.52
OXY Occidental Petroleum 11.79 2.88 1.72 0.19
EOG EOG Resources 29.73 3.11 2.69 0.46
APC Anadarko Petroleum 17.75 3.14 2.04 0.64
SWN Southwestern Energy NA 4.34 3.59 0.52
NBL Noble Energy 21.29 4.81 2.47 0.45
PXD Pioneer Natural Resources 142.42 5.06 2.87 0.65
CLR Continental Resources 37.57 7.86 5.37 1.01
RRC Range Resources NA 8.6 5.16 1.25
COG Cabot Oil & Gas 99.14 10.59 5.55 0.51

Based on price-to-earnings multiples and price-to-sales multiples, Chevron and Exxon Mobil are very attractive. None of them is significantly financed by long term debt, and their low valuation multiples compensate investors for the risks a commodity market.

Conclusion

Oil companies are price takers. Fortunately, value investors can see that there are two names with strong balance sheets that are cheap enough to compel them to jump into a commodity market.

The article Offset High Pump Prices With These 2 Energy Picks originally appeared on Fool.com and is written by Bill Edson.

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