| Newfield Exploration’s Relative Valuation: A Peer Comparison | |
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Newfield Exploration Had a Bullish 2015 despite Low Energy Prices (Continued from Prior Part) Newfield Exploration’s relative valuation
In the previous part of this series, we compared Newfield Exploration’s (NFX) EV-to-EBITDA (enterprise value to earnings before interest, tax, depreciation, and amortization) multiple against its own historical levels. In this part, we’ll look at the company’s valuation against the multiples of its peers.
Forward EV-to-EBITDA
A peer group comparison shows that NFX’s forward EV-to-EBITDA multiple of ~6.3 is higher than those of some of its peers. Murphy Oil (MUR) is currently trading at a forward EV-to-EBITDA multiple of ~4x. Marathon Oil (MRO) is trading at a multiple of ~6.2x. Cimarex Energy (XEC) is trading at a higher multiple of ~10.3x.
When compared to the industry, NFX appears to be in-line with its peer average of ~6.7x. Together, these companies make up ~2.8% of the Energy Select Sector SPDR ETF (XLE).
Newfield Exploration’s returns
In terms of returns, NFX offers better returns when its profitability is scaled by its shareholder equity. This calculation is called ROE (return on equity). NFX’s ROE stands at ~-1.7%, which is a result of the company’s negative net earnings. Among the company’s peers, XEC has the lowest ROE at -~43%.
In a tough energy price environment, NFX’s positive stock performance is notable. Many of its peers have seen their stock prices fall significantly this year. Their EBITDA levels have plunged. For some of them, including Cabot Oil and Gas (COG), debt levels have been on the rise. Read Market Realist’s Cabot Oil and Gas’s Net Debt Is on the Rise to learn more.
NFX has managed to keep its EBITDA levels consistent. It has also taken steps to keep a check on its debt levels.
Continue to Next Part Browse this series on Market Realist:
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Cimarex Energy Co.
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CODE : XEC |
ISIN : US1717981013 |
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ProfilIndicateurs de MarchéVALEUR : Projets & res.Communiqués de PresseRapport annuelRISQUE : Profile actifsContactez la cie |
Cimarex Energy est une société de production minière basée aux Etats-Unis D'Amerique. Cimarex Energy est cotée aux Etats-Unis D'Amerique et en Allemagne. Sa capitalisation boursière aujourd'hui est 8,3 milliards US$ (7,2 milliards €). La valeur de son action a atteint son plus haut niveau récent le 23 mai 2018 à 99,89 US$, et son plus bas niveau récent le 30 septembre 2021 à 87,20 US$. Cimarex Energy possède 95 438 121 actions en circulation. |