Editor's note: A previous version of this article misstated ConocoPhillips' proved reserves. The Fool regrets the error.

At the risk of sounding like Mr. Mackey, that annoying teacher on South Park, may I just say, "Rumors are bad, mmkay?" A case in point was the recent rumor that ExxonMobil would try to buy Anadarko Petroleum (NYSE:APC). But spotting potential takeover targets takes facts, analysis, and homework, not rumors. It turns out that Anadarko doesn't really stack up well against other energy stocks as a takeover candidate.

Rumor and reality
The rumors caused shares of Anadarko to jump on June 11, but just how attractive is the company as a target? According to Barron's, two analysts at JPMorgan Chase weren't buying the hype. Joseph Allen and Kevin Kwan pointed out that Anadarko valued itself at about $140 per share during an investor conference in March. They argue that an acquisition would have to bring a premium over Anadarko's own estimate. But this would make such a move prohibitively expensive given the current market price of about $109 per share.

The table below shows how Anadarko stacks up against two other valuation picks. The result? It's just not very appealing as a target.

Market Cap ($billion) 54.39 30.40 101.72
Trailing P/E N/A 7.71 11.27
Price/Sales (ttm) 3.51 1.40 1.74
Price/Book (mrq) 2.84 1.26 1.91
Proved Reserves (BBOE) 2.79 1.30 8.9

Data from Yahoo Finance and company sources

Attractive alternatives
Hess (NYSE:HES) emerged from my stock screen with appealing valuations and performance, and I was delighted to find that a fellow Fool had tagged the company as a possible takeover target back in May. Without belaboring those points again here, I'll just point out that Hess has earnings, sales, and book value multiples that are generally less than half those of Anadarko's.

Anadarko does have a slight edge over Hess in the theoretical acquisition price of its proved reserves. Using market capitalization as a proxy for takeover price, an acquirer would have to pay about $23 per barrel of oil equivalent, or BOE, for what Hess has in the ground. This is a bit higher than Anadarko's market price of about $19.50 per BOE.

Some may object to this comparison. While Anadarko is an integrated oil company, or IOC, Hess now has more of a pure upstream exploration and production model. Fine, so let's stay inside the IOC universe and take a look at ConocoPhillips (NYSE:COP). The company's multiples are all better than Anadarko's but not as attractive as those we saw with Hess. But take a gander at what ConocoPhillips shows for proved reserves.

ConocoPhillips has a market capitalization of about $102 billion and 8.9 billion BOE in the ground. If I were a suitor, I'd be sending flowers and candy to ConocoPhillips every day and serenading the company from beneath its moonlit balcony every night.

The Zen of Foolishness
This was just a cursory valuation comparison of these three stocks, but it demonstrates an important point. Watching for bargains and takeover candidates is great, but acting on rumors is not the Foolish way, mmkay? Instead, look for companies like Hess with low multiples of price to earnings, sales, and book value. Think about industry specific value metrics too, like the low acquisition cost of proved reserves that makes ConocoPhillips so interesting.

Finally, don't just concentrate on valuation alone. A good takeover candidate will be making money, have efficient operations, and be generating cash. Also, your stock may be waiting a long time for a suitor, so you could look for candidates with good dividends. That way, you can enjoy some income while your stock sits waiting by the phone.

Always do your homework, Fool, and give those rumors the short shrift they deserve.