Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 7 stocks made the list for top value stocks in the Oil & Gas - Exploration and Production 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 - Exploration and Production Stock News

Before choosing which top Oil & Gas - Exploration and Production 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 outlook for the oil and gas exploration and production sub-industry is mostly favorable for the foreseeable future. As a result of the COVID-19 pandemic, a major oil shock occurred in 2020. Since then, crude oil prices have begun to recover, currently priced at around $60 per barrel as a result of persistent supply cuts by the OPEC-Plus Consortium. While the demand perspective remains uncertain, from a supply perspective, both OPEC and non-OPEC participants have a conservative production outlook in 2021. The most significant unknown factor is the potential lifting of Iran sanctions by the Biden administration and its impact. According to the International Energy Agency (IEA), oil demand is expected to increase by about 5.4 mmb/d, to 96.4 mmb/d in 2021. While this appears to be a strong year-over-year increase, it is well in line with the 2019 demand of around 100 mmb/d, signifying only a 60% recovery from the pandemic. In May 2021, the EIA forecasted WTI crude oil prices as $59 dollars per barrel in 2021 and $57 per barrel in 2022. At these price points, exploration and production operations are expected to generate significant free cashflow.

Why Focus on Undervalued Oil & Gas - Exploration and Production 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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7 Undervalued Oil & Gas - Exploration and Production Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 7 undervalued stocks in the Oil & Gas - Exploration and Production industry for Thursday, February 08, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Oil & Gas - Exploration and Production 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.

Berry Corporation (Bry)’s Value Grade

Value Grade:

Berry Corporation (bry) is an independent upstream energy company. The Company operates through two segments: exploration and production (E&P;) and well servicing and abandonment (CJWS). The E&P; segment consists of the development and production of onshore, low geologic risk, long-lived conventional oil and gas reserves, primarily located in California, as well as Utah. Its California operating area consists of properties located in Midway-Sunset, South Belridge, McKittrick and Poso Creek fields in the San Joaquin basin in Kern County. The Company operates Uinta basin operations in the Brundage Canyon, Ashley Forest, and Lake Canyon areas in Utah. The well servicing and abandonment segment provides wellsite services in California for oil and natural gas production companies, with a focus on well servicing, well abandonment services and water logistics. The Company?s subsidiaries include Berry Petroleum Company, LLC; CJ Berry Well Services Management, LLC; and C&J; Well Services, LLC.

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.

Berry Corporation (Bry) has a Value Score of 85, which is considered to be undervalued.

When you look at Berry Corporation (Bry)’s price-to-sales ratio at 0.61 compared to the industry median at 1.71, this company has a lower price relative to revenue compared to its peers. This could make Berry Corporation (Bry)’s stock more attractive for value investors.

Berry Corporation (Bry)’s price-earnings ratio is 11.67 compared to the industry median at 6.94. This means it has a higher share price relative to earnings compared to its peers. This could make Berry Corporation (Bry) less attractive for value investors.

Now, let’s assess Berry Corporation (Bry)’s EV/EBITDA ratio, also known as enterprise multiple. At 6.7, when compared to the industry median of 4.5, the company may be considered overvalued 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. Berry Corporation (Bry)’s shareholder yield is higher than its industry median ratio of 1.38%. 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.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Berry Corporation (Bry)’s price-to-book ratio is lower than its industry median ratio of 1.19. This could make Berry Corporation (Bry) more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Berry Corporation (Bry)’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Berry Corporation (Bry)’s price-to-free-cash-flow ratio is higher than its industry median ratio of 7.22. This could make Berry Corporation (Bry) less attractive because the higher P/FCF ratio indicates that Berry Corporation (Bry) 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.

EQT Corp’s Value Grade

Value Grade:

EQT Corporation is a natural gas producer with operations focused on the Marcellus and Utica Shales of the Appalachian Basin. It has approximately 25.0 trillion cubic feet equivalents (Tcfe) of proved natural gas, natural gas liquids (NGLs), and crude oil reserves across approximately 2.0 million gross acres, including approximately 1.8 million gross acres in the Marcellus play. The Company is focused on the execution of combo-development projects, which refers to the development of several multi-well pads in tandem. It owns or leases approximately 610,000 net acres in Pennsylvania. The Company owns or leases approximately 405,000 net acres in West Virginia. It also owns or leases approximately 65,000 net acres in eastern Ohio. It primarily contracts with MarkWest Energy Partners, L.P. (MarkWest) to process its natural gas and extract from the produced natural gas heavier hydrocarbon streams consisting of ethane, propane, isobutane, normal butane and natural gasoline.

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.

EQT Corp has a Value Score of 81, which is considered to be undervalued.

EQT Corp’s price-earnings ratio is 5.2 compared to the industry median at 6.9. This means that it has a lower price relative to its earnings compared to its peers. This makes EQT Corp more attractive for value investors.

EQT Corp’s price-to-book ratio is higher than its peers. This could make EQT Corp less attractive for value investors when compared to the industry median at 1.19.

You can read more about EQT Corp’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.

Gran Tierra Energy Inc’s Value Grade

Value Grade:

Gran Tierra Energy Inc. is an independent international energy company. The Company is focused on international oil and natural gas exploration and production with assets in Colombia and Ecuador. The Company has interests in approximately 22 blocks in Colombia, three blocks in Ecuador, and is the operator of 24 of these blocks. Its assets in Colombia represent approximately 99% of its production with oil reserves and production mainly located in the Middle Magdalena Valley (MMV) and Putumayo Basin. In MMV, the Company’s field is the Acordionero field, where it produces approximately 17-degree American Petroleum Institute (API) oil, which represents 52% of total company production. The Putumayo production is approximately 27-degree API for Chaza Block and 18-degree API for Suoriente Block, representing 25% and 14% respectively, of total company production.

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.

Gran Tierra Energy Inc has a Value Score of 99, which is considered to be undervalued.

Gran Tierra Energy Inc’s price-earnings ratio is 9.7 compared to the industry median at 6.9. This means that it has a higher price relative to its earnings compared to its peers. This makes Gran Tierra Energy Inc less attractive for value investors.

Gran Tierra Energy Inc’s price-to-book ratio is higher than its peers. This could make Gran Tierra Energy Inc less attractive for value investors when compared to the industry median at 1.19.

You can read more about Gran Tierra Energy Inc’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.

Magnolia Oil & Gas Corp’s Value Grade

Value Grade:

Magnolia Oil & Gas Corporation is an independent oil and natural gas company. The Company is engaged in the acquisition, development, exploration, and production of oil, natural gas, and natural gas liquid (NGL) reserves. Its oil and natural gas properties are located primarily in Karnes County and the Giddings area in South Texas, where the Company targets the Eagle Ford Shale and Austin Chalk formations. Its assets consist of a total leasehold position of 688,033 gross (482,015 net) acres, including 43,022 gross (23,259 net) acres in the Karnes area and 645,011 gross (458,756 net) acres in the Giddings area. The Karnes County Assets are located in Karnes, Gonzales, DeWitt, and Atascosa Counties, Texas, in the core of the Eagle Ford Shale. The acreage comprising the Karnes County Assets also includes the Austin Chalk formation overlying the Eagle Ford Shale. The Giddings Assets are located in Austin, Brazos, Burleson, Fayette, Lee, Grimes, Montgomery, and Washington Counties, Texas.

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.

Magnolia Oil & Gas Corp has a Value Score of 65, which is considered to be undervalued.

Magnolia Oil & Gas Corp’s price-earnings ratio is 7.4 compared to the industry median at 6.9. This means that it has a higher price relative to its earnings compared to its peers. This makes Magnolia Oil & Gas Corp less attractive for value investors.

Magnolia Oil & Gas Corp’s price-to-book ratio is lower than its peers. This could make Magnolia Oil & Gas Corp more attractive for value investors when compared to the industry median at 1.19.

You can read more about Magnolia Oil & Gas Corp’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.

Occidental Petroleum Corp’s Value Grade

Value Grade:

Occidental Petroleum Corporation is an international energy company with assets primarily in the United States, the Middle East and North Africa. The Company operates through three segments: oil and gas, chemical and midstream and marketing. The oil and gas segment explores for, develops and produces oil, which includes condensate, natural gas liquids (NGL) and natural gas. The chemical segment primarily manufactures and markets basic chemicals and vinyl?s. The midstream and marketing segment purchases, markets, gathers, processes, transports, and stores oil, NGL, natural gas, carbon dioxide (CO2) and power. Midstream and marketing segment also includes Occidental?s low-carbon venture businesses (OLCV). OLCV develops carbon capture, utilization and storage (CCUS) projects, including the commercialization of DAC technology, and invests in other low-carbon technologies intended to reduce GHG emissions from its operations and partners with other industries to help reduce their emissions.

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.

Occidental Petroleum Corp has a Value Score of 69, which is considered to be undervalued.

Occidental Petroleum Corp’s price-earnings ratio is 12.6 compared to the industry median at 6.9. This means that it has a higher price relative to its earnings compared to its peers. This makes Occidental Petroleum Corp less attractive for value investors.

Occidental Petroleum Corp’s price-to-book ratio is lower than its peers. This could make Occidental Petroleum Corp more attractive for value investors when compared to the industry median at 1.19.

You can read more about Occidental Petroleum Corp’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.

Permian Resources Corp’s Value Grade

Value Grade:

Permian Resources Corporation is an independent oil and natural gas company. The Company is focused on the acquisition, optimization and development of oil and natural gas properties. The Company’s assets and operations are concentrated in the core of the Delaware Basin. Its operations are concentrated in the core of the Delaware Basin and include over 400,000 net leasehold acres across the Permian Basin, including Eddy and Lea Counties, New Mexico and Reeves and Ward Counties, Texas.

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.

Permian Resources Corp has a Value Score of 68, which is considered to be undervalued.

Permian Resources Corp’s price-earnings ratio is 14.7 compared to the industry median at 6.9. This means that it has a higher price relative to its earnings compared to its peers. This makes Permian Resources Corp less attractive for value investors.

Permian Resources Corp’s price-to-book ratio is lower than its peers. This could make Permian Resources Corp fairly attractive for value investors when compared to the industry median at 1.19.

You can read more about Permian Resources Corp’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.

W&T; Offshore, Inc.’s Value Grade

Value Grade:

W&T; Offshore, Inc. is an independent oil and natural gas producer. The Company is engaged in the exploration, development and acquisition of oil and natural gas properties in the Gulf of Mexico. It has a working interest in over 54 offshore producing fields in federal and state waters (which include 45 fields in federal waters and nine in state waters). The Company has under lease approximately 602,100 gross acres (446,800 net acres) spanning across the outer continental shelf off the coasts of Louisiana, Texas, Mississippi and Alabama, with approximately 440,600 gross acres on the conventional shelf, approximately 153,500 gross acres in the deepwater and 8,000 gross acres in Alabama onshore. The Company's wholly owned subsidiaries consists of Aquasition Energy, LLC, Aquasition, LLC, Aquasition II, LLC, Aquasition III, LLC, Aquasition IV, LLC, Aquasition V, LLC, Green Hell, LLC, Seaquester, LLC, Seaquestration, LLC, and W & T Energy VI, LLC.

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.

W&T; Offshore, Inc. has a Value Score of 69, which is considered to be undervalued.

W&T; Offshore, Inc.’s price-earnings ratio is 6.9 compared to the industry median at 6.9. This means that it has a higher price relative to its earnings compared to its peers. This makes W&T; Offshore, Inc. fairly attractive for value investors.

W&T; Offshore, Inc.’s price-to-book ratio is lower than its peers. This could make W&T; Offshore, Inc. more attractive for value investors when compared to the industry median at 1.19.

You can read more about W&T; Offshore, Inc.’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 - Exploration and Production 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 - Exploration and Production stocks as well as other industrys.

Choosing Which of the 7 Best Oil & Gas - Exploration and Production 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.

• Berry Corporation (Bry) stock has a Value Grade of A.
• EQT Corp stock has a Value Grade of A.
• Gran Tierra Energy Inc stock has a Value Grade of A.
• Magnolia Oil & Gas Corp stock has a Value Grade of B.
• Occidental Petroleum Corp stock has a Value Grade of B.
• Permian Resources Corp stock has a Value Grade of B.
• W&T; Offshore, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 7 undervalued stocks in the Oil & Gas - Exploration and Production 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 - Exploration and Production Stocks

Want to learn more about Oil & Gas - Exploration and Production 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.

• 7 Undervalued Oil & Gas - Exploration and Production Stocks for Thursday, February 08
• 4 Undervalued Oil & Gas - Exploration and Production Stocks for Wednesday, February 07
• Why Highpeak Energy Inc’s (HPK) Stock Is Down 4.09%
• 6 Undervalued Oil & Gas - Exploration and Production Stocks for Tuesday, February 06

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