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Are Investors Undervaluing Delek Logistics Partners, L.P. (DKL) Right Now?

Zacks Equity Research
·2-min read

While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Delek Logistics Partners, L.P. (DKL). DKL is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 6.80 right now. For comparison, its industry sports an average P/E of 11.29. DKL's Forward P/E has been as high as 11.24 and as low as 1.75, with a median of 8.27, all within the past year.

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Finally, investors will want to recognize that DKL has a P/CF ratio of 4.04. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. DKL's P/CF compares to its industry's average P/CF of 7.24. DKL's P/CF has been as high as 6.65 and as low as 1.04, with a median of 5.88, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Delek Logistics Partners, L.P. Is likely undervalued currently. And when considering the strength of its earnings outlook, DKL sticks out at as one of the market's strongest value stocks.


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Zacks Investment Research