TOT, SU, E, and PBR: Comparing Their Premium Valuations
In the earlier parts of this series, we looked at integrated energy stocks’ price performance, moving average changes, and dividend yields. In this part, we’ll consider the comparison of integrated energy stocks in terms of their forward valuations.
Let’s begin by looking at the average peer valuations of the foreign integrated energy companies Total (TOT), Suncor Energy (SU), ENI (E), and Petrobras (PBR). The average forward price-to-earnings (or PE) and average forward EV-to-EBITDA1 of these companies stand at 15.7x and 5.5x, respectively.
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Suncor Energy trades at a premium valuation
SU trades at a 21.1x forward price-to-earnings multiple and a 7.4x forward EV-to-EBITDA multiple, higher than the peer average. The valuation premium that Suncor Energy commands could be due to the company’s relatively improved leverage position compared to Total, ENI, and Petrobras.
TOT and Petrobras trade below their peer averages on both valuation metrics. ENI trades below the average forward EV-to-EBITDA but above the average forward PE.
However, if you’re looking for exposure to large-sized US companies, you can consider the SPDR Dow Jones Industrial Average ETF (DIA). This ETF also has ~6% of combined exposure to American integrated energy majors ExxonMobil (XOM) and Chevron (CVX).
To learn about American integrated energy stock valuations, please refer to Integrated Energy Stocks: Forward Valuations, XOM, CVX, RDS.A, BP.
To learn which integrated energy stocks saw a rise in institutional holdings in May, continue to the next part.
- enterprise value to earnings before interest, tax, depreciation, and amortization ↩