Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Oil & Gas - Transportation Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Oil & Gas - Transportation Services Stock News

Before choosing which top Oil & Gas - Transportation Services stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The fundamental outlook for the oil & gas transportation services (“midstream”) sub-industry is positive for the next 12 months. Midstream firms typically generate revenue via fee-based services. Pipeline services are usually on “take-or-pay" contracts. These contracts usually provided a fixed fee per unit for a set amount of capacity. The Russian invasion of Ukraine has highlighted the importance of having stable oil and gas supplies and could induce greater near-term reliance on North American production to help offset losses in Europe. Capital spending by exploration and production (E&P) companies is expected to rise 17% in 2022 (and 20%+ by integrated oil and gas companies), which provides some tailwinds for ancillary midstream needs. However, environmental concerns and proposed regulation spearheaded by the Biden administration pose a threat to exploration and production demand, which could hurt transportation services. Year to date through June 30, the S&P Oil & Gas Storage & Transportation Index rose 5.9% versus a decline of 20.5% for the S&P 1500. In 2021, the sub-industry rose 33.1% versus a 26.7% gain for the S&P 1500.

Why Focus on Undervalued Oil & Gas - Transportation Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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4 Undervalued Oil & Gas - Transportation Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Oil & Gas - Transportation Services industry for Wednesday, February 07, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Oil & Gas - Transportation Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Martin Midstream Partners LP’s Value Grade

Value Grade:

Martin Midstream Partners L.P. is engaged in providing specialty services to independent oil and gas companies, independent refiners and chemical companies. Its operations are primarily focused on the Gulf Coast region of the United States. Its segments include Terminalling and Storage, Transportation, Sulfur services and Specialty products. It owns or operates over 14 marine shore-based terminal facilities and nine specialty terminal facilities located primarily in the Gulf Coast region that provide storage, refining, and handling services for producers and suppliers of petroleum products and by-products, including the refining of naphthenic crude. The Specialty Products segment specializes in the marketing, distribution, and transportation services for natural gas liquids, as well as blending and packaging services for specialty lubricants and grease. It processes and distributes sulfur produced by oil refineries primarily located in the Gulf Coast region of the United States.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Martin Midstream Partners LP has a Value Score of 98, which is considered to be undervalued.

When you look at Martin Midstream Partners LP’s price-to-sales ratio at 0.10 compared to the industry median at 1.64, this company has a lower price relative to revenue compared to its peers. This could make Martin Midstream Partners LP’s stock more attractive for value investors.

Now, let’s assess Martin Midstream Partners LP’s EV/EBITDA ratio, also known as enterprise multiple. At 4.9, when compared to the industry median of 8.7, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Martin Midstream Partners LP’s shareholder yield is lower than its industry median ratio of 5.35%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

Lastly, let’s take a look at Martin Midstream Partners LP’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Martin Midstream Partners LP’s price-to-free-cash-flow ratio is lower than its industry median ratio of 11.78. This could make Martin Midstream Partners LP more attractive because the lower P/FCF ratio indicates that Martin Midstream Partners LP is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

Nordic American Tankers Ltd’s Value Grade

Value Grade:

Nordic American Tankers Limited is an international tanker company focusing solely on owning, operating and chartering of Suezmax tankers. The Company has a fleet of approximately 19 Suezmax crude oil tankers. Its Suezmax vessels has a carrying capacity of one million barrels of oil. The Company's tankers operating in the spot market are chartered for a single voyage. The vessels in the Company's fleet are homogenous and interchangeable as they have approximately the same freight capacity and ability to transport the same type of cargo. Its vessels include Nordic Pollux, Nordic Apollo, Nordic Luna, Nordic Castor, Nordic Freedom, Nordic Sprinter, Nordic Skier, Nordic Vega, Nordic Light, Nordic Cross, Nordic Breeze, Nordic Zenith, Nordic Star, Nordic Space, Nordic Aquarius, Nordic Cygnus, Nordic Tellus, Nordic Hunter and Nordic Harrier.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Nordic American Tankers Ltd has a Value Score of 83, which is considered to be undervalued.

Nordic American Tankers Ltd’s price-earnings ratio is 7.3 compared to the industry median at 12.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Nordic American Tankers Ltd more attractive for value investors.

Nordic American Tankers Ltd’s price-to-book ratio is lower than its peers. This could make Nordic American Tankers Ltd fairly attractive for value investors when compared to the industry median at 1.61.

You can read more about Nordic American Tankers Ltd’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Plains All American Pipeline, L.P.’s Value Grade

Value Grade:

Plains All American Pipeline, L.P. owns a network of pipeline transportation, terminalling, storage and gathering assets in crude oil and natural gas liquids (NGL) producing basins (including the Permian Basin) and transportation corridors. It has two segments: Crude Oil and Natural Gas Liquids (NGL). Its Crude Oil segment consists of gathering and transporting crude oil using pipelines, gathering systems, trucks and at times on barges or railcars, in addition to providing terminalling, storage and other facilities-related services utilizing its integrated assets across the United States and Canada. Its assets serve third parties and are also supported by its merchant activities. Its NGL segment operations involve natural gas processing and NGL fractionation, storage, transportation and terminalling. NGL segment is involved in gathering, fractionation, storage, and/or terminalling services to third-party customers for a fee, and merchant activities that support the assets.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Plains All American Pipeline, L.P. has a Value Score of 84, which is considered to be undervalued.

Plains All American Pipeline, L.P.’s price-earnings ratio is 11.3 compared to the industry median at 12.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Plains All American Pipeline, L.P. more attractive for value investors.

Plains All American Pipeline, L.P.’s price-to-book ratio is higher than its peers. This could make Plains All American Pipeline, L.P. less attractive for value investors when compared to the industry median at 1.61.

You can read more about Plains All American Pipeline, L.P.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Summit Midstream Partners LP’s Value Grade

Value Grade:

Summit Midstream Partners, LP is focused on developing, owning and operating midstream energy infrastructure assets located in the producing areas of unconventional resource basins, primarily shale formations, in the continental United States. The Company's segments include Rockies, which includes its wholly owned midstream assets located in the Williston Basin and the DJ Basin; Permian, which includes its equity method investment in Double E; Northeast, which includes its wholly owned midstream assets located in the Utica and Marcellus shale plays and its equity method investment in Ohio Gathering that is focused on the Utica Shale; Piceance, which includes its wholly owned midstream assets located in the Piceance Basin., and Barnett which includes its wholly owned midstream assets located in the Barnett Shale. The Company provides natural gas, crude oil and produced water gathering, processing and transportation services.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Summit Midstream Partners LP has a Value Score of 85, which is considered to be undervalued.

Summit Midstream Partners LP’s price-to-book ratio is higher than its peers. This could make Summit Midstream Partners LP less attractive for value investors when compared to the industry median at 1.61.

You can read more about Summit Midstream Partners LP’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Oil & Gas - Transportation Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Oil & Gas - Transportation Services stocks as well as other industrys.

Choosing Which of the 4 Best Oil & Gas - Transportation Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Martin Midstream Partners LP stock has a Value Grade of A.
• Nordic American Tankers Ltd stock has a Value Grade of A.
• Plains All American Pipeline, L.P. stock has a Value Grade of A.
• Summit Midstream Partners LP stock has a Value Grade of A.

Now that you have a bit more background about each of the 4 undervalued stocks in the Oil & Gas - Transportation Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Oil & Gas - Transportation Services Stocks

Want to learn more about Oil & Gas - Transportation Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 4 Undervalued Oil & Gas - Transportation Services Stocks for Wednesday, February 07
• Is Cheniere Energy Partners LP (CQP) a Good Dividend Stock?
• Is Cheniere Energy Partners LP (CQP) Stock a Good Investment?
• Which Is a Better Investment, Cheniere Energy Partners LP or Enbridge Inc (USA) Stock?

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