Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 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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3 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 3 undervalued stocks in the Oil & Gas - Transportation Services industry for Friday, February 09, 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 1.66, 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 5.36%. 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 11.93. 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.

SFL Corporation Ltd’s Value Grade

Value Grade:

SFL Corporation Ltd. is an international ship owning and chartering company. The Company is engaged in the ownership and operation of vessels and offshore related assets, and also involved in the charter, purchase and sale of assets. The Company’s assets consist of 15 dry bulk carriers, 32 container vessels (including seven chartered-in vessels), one jack-up drilling rig, one harsh environment semi-submersible drilling unit, six oil product tankers, seven crude oil tankers, three car carriers and four car carriers. The Company owns and manages a fleet of 73 vessels, split between tankers, bulkers, container vessels, car carriers and energy assets. Its vessels include SFL Yangtze, SFL Yukon, SFL Sara, SFL Kate, SFL Humber, SFL Hudson, Arabian Sea, Thor Highway, Odin Highway, Maersk Pelepas, Maersk Phuket Maersk, Linus, SFL Puma, SFL Panther, Semi-submersible, SFL Albany, SFL Fraser and others. It also partly owns four chartered-in container vessels in its associated companies.

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.

SFL Corporation Ltd has a Value Score of 64, which is considered to be undervalued.

SFL Corporation Ltd’s price-earnings ratio is 17.0 compared to the industry median at 12.7. This means that it has a higher price relative to its earnings compared to its peers. This makes SFL Corporation Ltd less attractive for value investors.

SFL Corporation Ltd’s price-to-book ratio is higher than its peers. This could make SFL Corporation Ltd less attractive for value investors when compared to the industry median at 1.62.

You can read more about SFL Corporation 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.

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 1.62.

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 3 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.
• SFL Corporation Ltd stock has a Value Grade of B.
• Summit Midstream Partners LP stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 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.

• 3 Undervalued Oil & Gas - Transportation Services Stocks for Friday, February 09
• 4 Undervalued Oil & Gas - Transportation Services Stocks for Thursday, February 08
• 4 Undervalued Oil & Gas - Transportation Services Stocks for Wednesday, February 07
• Is Cheniere Energy Partners LP (CQP) a Good Dividend Stock?

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