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 Tuesday, February 13, 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.

Dorian LPG Ltd’s Value Grade

Value Grade:

Dorian LPG Ltd. is a liquefied petroleum gas (LPG) shipping company. The Company and its subsidiaries are focused on owning and operating very large gas carriers (VLGCs) in the LPG shipping industry. The Company?s fleet consists of 25 VLGCs, including one dual-fuel 84,000 cubic meters (cbm) ECO-design VLGC (Dual-fuel ECO VLGC), 19 fuel-efficient 84,000 cbm ECO-design VLGCs (ECO VLGCs), one 82,000 cbm modern VLGC, two time chartered-in dual fuel Panamax size VLGCs, and two time chartered-in ECO VLGCs. It provides in-house commercial and technical management services for all of its vessels. Thirteen of its ECO VLGCs, including one of its time-chartered-in ECO-VLGCs, are fitted with exhaust gas cleaning systems to reduce sulfur emissions. Its subsidiaries include Dorian LPG Management Corp., Dorian LPG Finance LLC, Dorian LPG (UK) Ltd, Occident River Trading Limited, Dorian LPG Chartering LLC, CJNP LPG Transport LLC, Commander LPG Transport LLC and others.

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.

Dorian LPG Ltd has a Value Score of 71, which is considered to be undervalued.

When you look at Dorian LPG Ltd’s price-to-sales ratio at 2.61 compared to the industry median at 1.69, this company has a higher price relative to revenue compared to its peers. This could make Dorian LPG Ltd’s stock less attractive for value investors.

Dorian LPG Ltd’s price-earnings ratio is 4.74 compared to the industry median at 12.89. This means it has a lower share price relative to earnings compared to its peers. This could make Dorian LPG Ltd more attractive for value investors.

Now, let’s assess Dorian LPG Ltd’s EV/EBITDA ratio, also known as enterprise multiple. At 5.5, 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. Dorian LPG Ltd’s shareholder yield is lower than its industry median ratio of 4.96%. 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. Dorian LPG Ltd’s price-to-book ratio is lower than its industry median ratio of 1.64. This could make Dorian LPG Ltd more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Dorian LPG Ltd’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Dorian LPG Ltd’s price-to-free-cash-flow ratio is lower than its industry median ratio of 12.17. This could make Dorian LPG Ltd more attractive because the lower P/FCF ratio indicates that Dorian LPG Ltd 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.

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.

You can read more about Martin 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.

Navigator Holdings Ltd’s Value Grade

Value Grade:

Navigator Holdings Ltd. is a United Kingdom-based owner and operator of liquefied gas carriers. The Company is engaged in the seaborne transportation services of petrochemical gases, such as ethylene and ethane, liquefied petroleum gas (LPG) and ammonia. It also owns a 50% share in an ethylene export marine terminal at Morgan’s Point, Texas on the Houston Ship Channel, United States. The Company’s fleet consists of 56 semi-or fully refrigerated liquefied gas carriers, 25 of which are ethylene and ethane capable. The Company plays a role in the liquefied gas supply chain for energy companies, industrial consumers and commodity traders with its vessels. Its services include Maritime Logistics, Ship Shore Infrastructure and Consultancy, New Trends. It unlocks the possibilities of participating in global trade flows of liquefied gases, including propane, butane, ethane and petrochemical gases, such as ethylene, propylene and butadiene, and ammonia.

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.

Navigator Holdings Ltd has a Value Score of 71, which is considered to be undervalued.

Navigator Holdings Ltd’s price-earnings ratio is 15.6 compared to the industry median at 12.9. This means that it has a higher price relative to its earnings compared to its peers. This makes Navigator Holdings Ltd less attractive for value investors.

Navigator Holdings Ltd’s price-to-book ratio is higher than its peers. This could make Navigator Holdings Ltd less attractive for value investors when compared to the industry median at 1.64.

You can read more about Navigator Holdings 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.

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.

• Dorian LPG Ltd stock has a Value Grade of B.
• Martin Midstream Partners LP stock has a Value Grade of A.
• Navigator Holdings Ltd stock has a Value Grade of B.

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 Tuesday, February 13
• 4 Undervalued Oil & Gas - Transportation Services Stocks for Monday, February 12
• 3 Undervalued Oil & Gas - Transportation Services Stocks for Friday, February 09
• What You Need to Know About Enbridge Inc (USA)'s Q4 Earnings

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