Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 5 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.

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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5 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 5 undervalued stocks in the Oil & Gas - Exploration and Production industry for Wednesday, February 21, 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.

Eca Marcellus Trust I’s Value Grade

Value Grade:

ECA Marcellus Trust I (the Trust) is a statutory trust. The Trust does not conduct any operations or activities. The Trust owns royalty interests in approximately 14 Producing Wells and royalty interests in over 52 horizontal natural gas development wells to be drilled to the Marcellus Shale formation (the PUD Wells) within the area of mutual interest (AMI), in which ECA holds approximately 9,300 acres, of which it owned all of the working interests, in Greene County, Pennsylvania. The Trust also holds royalty interests in over 40 development wells that are in production. The Trust subsidiaries include Greylock Production, LLC (Greylock Production), which serves as operator of the subject wells, and Greylock Midstream, LLC (Greylock Midstream), whose subsidiaries market and gather certain of the gas. The Bank of New York Mellon Trust Company, N.A. serves as Trustee.

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.

Eca Marcellus Trust I has a Value Score of 97, which is considered to be undervalued.

When you look at Eca Marcellus Trust I’s price-to-sales ratio at 1.84 compared to the industry median at 1.86, this company has a lower price relative to revenue compared to its peers. This could make Eca Marcellus Trust I’s stock more attractive for value investors.

Eca Marcellus Trust I’s price-earnings ratio is 2.77 compared to the industry median at 7.37. This means it has a lower share price relative to earnings compared to its peers. This could make Eca Marcellus Trust I more attractive for value investors.

Now, let’s assess Eca Marcellus Trust I’s EV/EBITDA ratio, also known as enterprise multiple. At 3.3, when compared to the industry median of 4.6, 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. Eca Marcellus Trust I’s shareholder yield is higher than its industry median ratio of 1.58%. 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. Eca Marcellus Trust I’s price-to-book ratio is lower than its industry median ratio of 1.23. This could make Eca Marcellus Trust I more attractive to investors looking for a new addition to their portfolio.

Gulfport Energy Corp’s Value Grade

Value Grade:

Gulfport Energy Corporation is an independent natural gas-weighted exploration and production company. The Company is focused on the exploration, acquisition, and production of natural gas, crude oil and natural gas liquid (NGL) in the United States, with a primary focus in the Appalachia and Anadarko basins. Its principal properties are located in Eastern Ohio, targeting the Utica and in central Oklahoma targeting the South-Central Oklahoma Oil Province (SCOOP) Woodford and SCOOP Springer formations. The Utica is a hydrocarbon-bearing rock formation located in the Appalachian Basin of the United States and Canada. It has approximately 188,000 net reservoir acres located primarily in Belmont, Harrison, Jefferson and Monroe Counties in Eastern Ohio. The SCOOP play mainly targets the Devonian to Mississippian aged Woodford Shale. It has approximately 73,000 net reservoir acres located primarily in Garvin, Grady and Stephens Counties.

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.

Gulfport Energy Corp has a Value Score of 95, which is considered to be undervalued.

Gulfport Energy Corp’s price-earnings ratio is 1.5 compared to the industry median at 7.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Gulfport Energy Corp more attractive for value investors.

Gulfport Energy Corp’s price-to-book ratio is lower than its peers. This could make Gulfport Energy Corp more attractive for value investors when compared to the industry median at 1.23.

You can read more about Gulfport Energy 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.

Kolibri Global Energy Inc’s Value Grade

Value Grade:

Kolibri Global Energy Inc. is an international energy company. The Company is focused on finding and exploiting energy projects in oil, gas, and clean and sustainable energy. Through various subsidiaries, the Company owns and operates energy properties in the United States. It is also focused on identifying and acquiring additional projects. The Company has operations in the Ardmore Basin, Oklahoma. It holds approximately 17,200 net contiguous acres and its reserves are from the Caney Formation. The Company is also focused on the continued development and exploitation of its Tishomingo field in Oklahoma. Its subsidiaries include BNK Petroleum Holding Inc., BNK Petroleum (US) Inc., BNK Sedano Hidrocarburos, S.L., BNK Canada Holdings, Inc., and BNK Sedano Holdings B.V.

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.

Kolibri Global Energy Inc has a Value Score of 90, which is considered to be undervalued.

Kolibri Global Energy Inc’s price-earnings ratio is 4.7 compared to the industry median at 7.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Kolibri Global Energy Inc more attractive for value investors.

Kolibri Global Energy Inc’s price-to-book ratio is higher than its peers. This could make Kolibri Global Energy Inc less attractive for value investors when compared to the industry median at 1.23.

You can read more about Kolibri Global 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.

Ovintiv Inc’s Value Grade

Value Grade:

Ovintiv Inc. is an oil and natural gas exploration and production company. The Company is focused on the development of its multi-basin portfolio of top tier oil and natural gas assets located in the United States and Canada. Its operations also include the marketing of oil, natural gas liquids (NGLs) and natural gas. The Company operates through three segments: USA Operations, Canadian Operations and Market Optimization. USA Operations segment includes the exploration for, development of, and production of oil, NGLs, natural gas and other related activities within the United States. Canadian Operations segment includes the exploration for, development of, and production of oil, NGLs, natural gas and other related activities within Canada. Market Optimization segment is primarily responsible for the sale of the Company’s production to third-party customers and enhancing the associated netback price. The segment’s activities also include third-party purchases and sales of products.

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.

Ovintiv Inc has a Value Score of 76, which is considered to be undervalued.

Ovintiv Inc’s price-earnings ratio is 4.4 compared to the industry median at 7.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Ovintiv Inc more attractive for value investors.

Ovintiv Inc’s price-to-book ratio is lower than its peers. This could make Ovintiv Inc more attractive for value investors when compared to the industry median at 1.23.

You can read more about Ovintiv 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.

TXO Partners LP’s Value Grade

Value Grade:

TXO Partners, L.P. is an oil and gas company. The Company is focused on the acquisition, development, optimization and exploitation of conventional oil, natural gas, and natural gas liquid reserves in North America. The Company’s acreage positions are concentrated in the Permian Basin of West Texas and New Mexico and the San Juan Basin of New Mexico and Colorado. The Company seeks to maintain low-risk development and exploitation of its existing properties, increasing its reserves and production. It owns 50% of Cross Timbers Energy, LLC (Cross Timbers Energy). Cross Timbers Energy’s properties are located primarily in the San Juan Basin of New Mexico and Colorado and the Permian Basin of West Texas and New Mexico. The Company also has a wholly owned subsidiary, MorningStar Operating LLC, which owns oil and gas assets primarily in the San Juan Basin of New Mexico and Colorado and the Permian Basin of West Texas and New Mexico. oil and gas company.

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.

TXO Partners LP has a Value Score of 89, which is considered to be undervalued.

TXO Partners LP’s price-earnings ratio is 8.0 compared to the industry median at 7.4. This means that it has a higher price relative to its earnings compared to its peers. This makes TXO Partners LP less attractive for value investors.

TXO Partners LP’s price-to-book ratio is higher than its peers. This could make TXO Partners LP less attractive for value investors when compared to the industry median at 1.23.

You can read more about TXO 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 - 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 5 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.

• Eca Marcellus Trust I stock has a Value Grade of A.
• Gulfport Energy Corp stock has a Value Grade of A.
• Kolibri Global Energy Inc stock has a Value Grade of A.
• Ovintiv Inc stock has a Value Grade of B.
• TXO Partners LP stock has a Value Grade of A.

Now that you have a bit more background about each of the 5 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.

• 5 Undervalued Oil & Gas - Exploration and Production Stocks for Wednesday, February 21
• 7 Undervalued Oil & Gas - Exploration and Production Stocks for Tuesday, February 20
• What You Need to Know About Chesapeake Energy Corp's Q4 Earnings
• What You Need to Know About Diamondback Energy Inc's Q4 Earnings

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