By Mill Chart
Last update: Oct 16, 2025
The search for undervalued companies with solid basic business operations is a key part of value investing. This approach involves finding stocks selling for less than their true worth, often identified by a close look at financial condition, earnings, and future possibilities. One way to simplify this search is by using screening tools that sort for stocks with good valuation numbers while keeping acceptable scores in other basic areas. A stock that recently appeared through such a "Decent Value" screen, which focuses on a high valuation score along with acceptable condition, earnings, and growth, is Coterra Energy Inc (NYSE:CTRA).
For value investors, valuation is the main filter, looking for companies where the current market price seems separate from the business's basic worth. Coterra Energy's valuation numbers present a strong case, giving it a high score of 8 out of 10 in this group. The company's stock seems low-cost on several important measures when matched against both its industry and the wider market.
This combined information indicates the market may be pricing Coterra Energy too low, making a possible opening for investors who think the company's true worth is greater.
A low stock price loses its attraction if the company's financial base is unsteady. Value investors look for a safety buffer, which involves putting money into companies that are not weighed down by debt and can survive economic slowdowns. Coterra Energy gets an average condition rating of 5, showing a steady, though not outstanding, financial state.
The company shows stability through a careful Debt-to-Equity ratio of 0.29, which is stronger than 62% of its industry peers and shows a small use of debt financing. Also, its Debt-to-Free-Cash-Flow ratio of 2.83 is good, showing it would take under three years of current cash flow to settle all debts, doing better than 78% of the industry. Its cash-on-hand ratios, including a Current Ratio of 1.13, are sufficient and similar to industry averages, suggesting it can handle its immediate responsibilities without trouble.
A company must have earnings to finally support a higher valuation. Steady profits and cash flow are indicators of a good business. Coterra gets a firm earnings rating of 7, supported by a good history and healthy margins.
The company has recorded positive profits and operating cash flow in each of the last five years. Its net margin of 23.80% and operating margin of 31.25% put it in the top group of its industry, doing better than 79% and 76% of peers, in that order. While these margins have had some recent reduction, they remain solid. The company also has a notable gross margin of 82.52%, which is not just high but has been increasing, showing good control over its cost of products sold.
While pure value investing concentrates on current price, lasting long-term returns often need some part of growth to trigger a re-pricing of the stock. Coterra Energy shows positive growth patterns, getting a rating of 7 in this group.
The company's income increased by 17.10% over the past year, and its five-year average yearly income growth is a good 21.44%. Looking ahead, analysts predict continued strength, with expected yearly EPS growth of 14.42% and income growth of 16.63% in the next few years. This quickening in earnings growth from its past pattern is a good sign for investors.
Coterra Energy Inc presents a picture that matches the ideas of value investing. The stock sells at a major discount based on several valuation measures, offering a possible safety buffer. This low-cost valuation is combined with a financially steady company that produces good earnings and shows a healthy growth path. For investors screening for companies that are both low-priced and basically solid, CTRA deserves a more detailed examination.
This analysis was based on the detailed fundamental report for CTRA. Investors interested in finding other companies that fit a similar picture of good valuation and acceptable basics can look at more results using the Decent Value Stocks screen.
Disclaimer: This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any securities. The analysis presented is based on data believed to be reliable, but its accuracy cannot be guaranteed. All investing involves risk, including the possible loss of principal.
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