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Comparing Refiners’ Valuation Ratios – Market Realist


A Look at Refining Stocks’ Post-1Q17 Performance PART 9 OF 12

Refiners’ valuation ratios

In this part, we’ll compare refiners’ PEG (price-to-earnings-to-growth) ratios. Usually, with everything else being equal, a PEG ratio lower than one indicates that a stock is undervalued, and a higher ratio indicates that a stock is expensive. Marathon Petroleum’s (MPC) PEG ratio stands at 0.66, above Marathon’s, Valero Energy’s (VLO), Tesoro’s (TSO), and Phillips 66’s (PSX) average of 0.61.

Comparing Refiners’ Valuation Ratios

TSO has the highest PEG ratio

VLO and PSX have PEG ratios of 0.49 and 0.58, respectively, below the peer average. Tesoro has the highest PEG ratio, with 0.72. The iShares Russell 1000 Value ETF (IWD) has a ~12% exposure to energy sector stocks.



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