AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Summary
- Spartan Delta Corp. has a P/E ratio of 0.72x based on Thursday’s closing price of CA$4.11.
- Obsidian Energy Ltd. has a P/E ratio of 1.03x based on Thursday’s closing price of CA$9.13.
- Saturn Oil & Gas Inc. has a P/E ratio of 0.48x based on Thursday’s closing price of CA$2.62.
Stocks that have a high intrinsic value as compared to their market price are known as undervalued stocks. These stocks are bought by investors as they are expected to bring in profits to the investors in the future.
The market price of these stocks generally rises as the market rectifies itself and the market price matches the stock’s intrinsic value. A key identifier of undervalued stocks is the presence of a relatively low P/E or price-to-earnings ratio. The P/E ratio of undervalued stocks is generally lower than the P/E ratio of the overall sector that the stock belongs to.
ALSO READ: Watch these TSX-listed stocks as inflation climbs 3.3%
A lower-than-average P/E ratio indicates that the stock may offer higher value for money. Alongside that, undervalued stocks also have strong fundamentals such as robust finances and a stable free cash flow.
Now, let us examine three energy sector stocks and have a closer look at their financials:
Spartan Delta Corp. (TSX: SDE)
Spartan Delta is an oil and natural gas firm that develops and produces these resources apart from conduction their exploration. Spartan’s market cap stands at over CA$711 million.
Image source: ©2023 Kalkine®; Data source: Company Reports
For Q2 2023, Spartan Delta reported a net income of CA$457.1 million, which marked a massive 151% jump over the previous corresponding period. The company also generated free funds flow of CA$27.5 million in Q2 2023.
The company paid a special dividend of CA$0.10 per common share on July 31, 2023.
Powered By: TardingView
Based on SDE’s closing price of CA$4.11 on Thursday, the stock has a P/E ratio of 0.72x. Meanwhile, the stock has seen an intraday increase of 0.74% on August 17, 2023. However, the stock was lower on a YTD basis by 72.23% as at the end of trade on August 17, 2023.
ALSO READ: ACQ & NOVC: Watch these retail sector stocks
Obsidian Energy Ltd. (TSX: OBE)
Obsidian Energy is an oil and gas producer that holds assets in Alberta. Obsidian’s market cap stands at over CA$741 million.
Image source: ©2023 Kalkine®; Data source: Company Reports
The company’s net income for Q2 2023 stood at CA$18.4 million, as compared to CA$113.9 million in Q2 2022. Obsidian’s cash flow from operating activities was CA$67.1 million in the June 2023 quarter.
Powered By: TradingView
Based on Thursday’s closing price of CA$9.13, OBE has a P/E ratio of 1.03x. OBE closed 1.78% higher intraday and 1.90% higher on a YTD basis on August 17, 2023.
Saturn Oil & Gas Inc. (TSX: SOIL)
Saturn Oil acquires and explores petroleum and natural gas deposits in Canada. It focuses on the west-central and Southeast Saskatchewan regions.
Image source: ©2023 Kalkine®; Data source: Company Reports
During Q2 2023, Saturn Oil reported petroleum and natural gas sales of CA$176 million, which was higher than Q2 2022’s CA$82.2 million. Meanwhile, SOIL’s adjusted EBITDA stood at CA$92.9 million in Q2 2023, as against CA$18 million in Q2 2022.
SOIL’s operating activities’ cash flow for the three months lasting till June 30, 2023, was CA$94.23 million. This marked an increase over June 2022’s operating activity cash flow of CA$20.39 million.
Powered By: TradingView
Based on Thursday’s closing price of CA$2.62, SOIL has a P/E ratio of 0.48x. The stock rose by 0.38% intraday and by 2.34% on a YTD basis as at the close of trade on August 17, 2023.
