X
<

What Caused Top Refining Stocks to Fall in 1Q17?

PART:
1 2 3 4 5 6 7 8 9 10 11
Part 9
What Caused Top Refining Stocks to Fall in 1Q17? PART 9 OF 11

How Refining Stocks’ Valuations Compare to Historical Averages

Refining stocks’ valuations

In this article, we’ll look at refining stocks’ EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) ratios compared to their three-year historical averages.

Marathon Petroleum (MPC), Valero Energy (VLO), Phillips 66 (PSX), and Tesoro (TSO) are trading at higher valuations than their historical values. MPC, TSO, VLO, and PSX are trading at 10.3x, 8.2x, 6.2x, and 19.3x, respectively, compared to their averages of 6.2x, 5.7x, 4.5x, and 11.7x, respectively, over the past three years.

How Refining Stocks&#8217; Valuations Compare to Historical Averages

Interested in PSX? Don't miss the next report.

Receive e-mail alerts for new research on PSX

Success! You are now receiving e-mail alerts for new research. A temporary password for your new Market Realist account has been sent to your e-mail address.

Success! has been added to your Ticker Alerts.

Success! has been added to your Ticker Alerts. Subscriptions can be managed in your user profile.

MPC, VLO, PSX, and TSO are trading at higher valuations than their historical averages due to the falls in their stock prices being lower than the falls in their earnings. This difference means that investors are holding onto these companies’ stocks despite their volatile performances.

Investors’ enthusiasm is likely the result of MPC’s taking a strategic initiative to unlock shareholder value, PSX’s ardently working on creating a diversified earnings model, and TSO’s leaping on an inorganic growth path with its ongoing acquisition of Western Refining (WNR).

For exposure to small-cap stocks, you can consider the iShares Russell 2000 Value ETF (IWN). The ETF has ~6% exposure to energy sector stocks such as WNR.

X

Please select a profession that best describes you: