Better Buy: ExxonMobil or Halliburton?

In a new Motley Fool series, we pit two stocks against each other on five criteria to determine the better buy.

Today's matchup is ExxonMobil (NYSE: XOM  ) vs. Halliburton (NYSE: HAL  ) . Using five short-of-scientific-but-carefully chosen criteria, let's determine which is the better buy according to the numbers:

	Factor	ExxonMobil	Halliburton
Cheapness	(P/E ratio)	17.8	19.9
Growth	(5-year growth rate)	5.20	-5.25
Operations	(net margin %)	7.37	10.64
Balance Sheet	(debt/equity ratio)	.09	.53
CAPS Rating	(scale of 1 to 5 stars)

Round 1: Cheapness

Advantage: ExxonMobil. Cheapness is determined by P/E ratio. The lower the better. Be careful of earnings near zero that skew the ratio, one-time gains and losses, and pasts that aren’t indicative of futures (the more dynamic the industry, the more this is true).

Round 2: Growth

Advantage: ExxonMobil. Growth is determined by Wall Street analysts’ 5-year projections. The caution: it’s been shown that Wall Street is highly optimistic.

Round 3: Operations

Advantage: Halliburton. Net margins shows the percentage of revenue that hits the bottom line. The more similar the business models, the more relevant the comparison.

Round 4: Balance sheet

Advantage: ExxonMobil. As with net margins, the debt to capital ratio is most relevant in comparing companies in similar industries. In this battle we give the nod to the lower-debt company, but attention should also be paid to the cost of debt, interest coverage ratios, and the stability of the business (the more stable a company’s operations, the more debt it can safely carry).

Round 5: CAPS rating

Advantage: ExxonMobil. A company’s CAPS rating is our community’s opinion of the stock. ExxonMobil has a slightly greater numerical CAPS rating than Halliburton (even though they have the same number of stars). You can get more information on your stocks -- and our community’s opinions of those stocks -- by clicking over to CAPS area.

Each of these five rankings need more context -- like, how these companies stack up against key competitors such as Chevron (NYSE: CVX  ) and Baker Hughes (NYSE: BHI  ) . But these basic numbers suggest that ExxonMobil is a better buy. What do you think? Let us know in the comments section below.