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 - Refining and Marketing 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 - Refining and Marketing 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 - Refining and Marketing 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 - Refining and Marketing 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 - Refining and Marketing 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.

CVR Energy, Inc.’s Value Grade

Value Grade:

CVR Energy, Inc. is a diversified holding company. The Company is primarily engaged in the renewable fuels and petroleum refining and marketing businesses, as well as in the nitrogen fertilizer manufacturing business through its subsidiary, CVR Partners, LP. The Company operates through two segments: Petroleum and Nitrogen Fertilizer. Petroleum Segment refines and markets transportation fuels. Petroleum Segment is composed of the assets and operations of two refineries located in Coffeyville, Kansas and Wynnewood, Oklahoma and supporting logistics assets in the region. Cofeyville Refinery is a full coking, medium-sour crude oil refinery in southeast Kansas, approximately 100 miles from Cushing, Oklahoma. Its Wynnewood Refinery is a complex crude oil refinery in Wynnewood, Oklahoma, approximately 65 miles south of Oklahoma City, Oklahoma. Nitrogen Fertilizer segment produces and markets nitrogen fertilizers in the form of urea and ammonium nitrate (UAN) 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.

CVR Energy, Inc. has a Value Score of 94, which is considered to be undervalued.

When you look at CVR Energy, Inc.’s price-to-sales ratio at 0.36 compared to the industry median at 0.30, this company has a higher price relative to revenue compared to its peers. This could make CVR Energy, Inc.’s stock less attractive for value investors.

CVR Energy, Inc.’s price-earnings ratio is 4.39 compared to the industry median at 11.57. This means it has a lower share price relative to earnings compared to its peers. This could make CVR Energy, Inc. more attractive for value investors.

Now, let’s assess CVR Energy, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 3.4, when compared to the industry median of 5.9, 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. CVR Energy, Inc.’s shareholder yield is higher than its industry median ratio of 5.72%. 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. CVR Energy, Inc.’s price-to-book ratio is higher than its industry median ratio of 2.02. This could make CVR Energy, Inc. less attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at CVR Energy, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. CVR Energy, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 14.34. This could make CVR Energy, Inc. more attractive because the lower P/FCF ratio indicates that CVR Energy, Inc. 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.

Delek US Holdings Inc’s Value Grade

Value Grade:

Delek US Holdings, Inc. is a diversified downstream energy company. The Company is focused on petroleum refining; the transportation, storage and wholesale distribution of crude oil, intermediate and refined products; and convenience store retailing. It has three segments. Refining segment processes crude oil and other feedstocks for the manufacture of transportation motor fuels, including various grades of gasoline, diesel fuel and aviation fuel, asphalt and other petroleum-based products. Logistics segment owns and operates crude oil, refined products and natural gas logistics and marketing assets, as well as water disposal and recycling assets for the use in providing logistics, marketing, disposal and recycling services to customers; primary customer is Delek, inter-company transactions are eliminated in consolidation. Retail segment offers various grades of gasoline and diesel under the DK or Alon brand name, primarily sourced by its Big Spring refinery.

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.

Delek US Holdings Inc has a Value Score of 79, which is considered to be undervalued.

Delek US Holdings Inc’s price-earnings ratio is 25.6 compared to the industry median at 11.6. This means that it has a higher price relative to its earnings compared to its peers. This makes Delek US Holdings Inc less attractive for value investors.

Delek US Holdings Inc’s price-to-book ratio is higher than its peers. This could make Delek US Holdings Inc less attractive for value investors when compared to the industry median at 2.02.

You can read more about Delek US Holdings 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.

Par Pacific Holdings Inc’s Value Grade

Value Grade:

Par Pacific Holdings, Inc. owns and operates energy and infrastructure businesses. The Company's segments include Refining, Retail and Logistics and Corporate and Other. The Refining segment buys and refines crude oil and other feedstocks into petroleum products, such as gasoline and distillates at its Hawaii, Wyoming, and Washington refineries. This segment owns and operates three refineries with a total operating crude oil throughput capacity of about 155 thousand barrels per day (Mbpd). The Retail segment operates fuel retail outlets in Hawaii, Washington, and Idaho. Its fuel retail outlets in Hawaii sell gasoline and diesel throughout the islands of Oahu, Maui, Hawaii, and Kauai. It operates convenience stores at its Hawaii retail fuel outlets under its nomnom brand that sell merchandise, such as soft drinks, prepared foods, and other sundries. The Logistics segment operates a multi-modal logistics network spanning the Pacific, the Northwest, and the Rocky Mountain regions.

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.

Par Pacific Holdings Inc has a Value Score of 90, which is considered to be undervalued.

Par Pacific Holdings Inc’s price-earnings ratio is 4.4 compared to the industry median at 11.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Par Pacific Holdings Inc more attractive for value investors.

Par Pacific Holdings Inc’s price-to-book ratio is lower than its peers. This could make Par Pacific Holdings Inc more attractive for value investors when compared to the industry median at 2.02.

You can read more about Par Pacific Holdings 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.

Vertex Energy Inc’s Value Grade

Value Grade:

Vertex Energy, Inc. is an energy transition company specializing in refining and marketing high-value conventional and lower-carbon alternative transportation fuels. The Company operates through two segments: Refining and Marketing, and Black Oil and Recovery. The Refining and Marketing segment manages the refining of crude oil and distributes finished products across the southeastern United States through a high-capacity truck rack, together with deep and shallow water distribution points capable of supplying waterborne vessels. The Black Oil and Recovery segment aggregates and manages the re-refinement of used motor oil and other petroleum by-products and sells the re-refined products to end customers. It manages the logistics of transport, storage and delivery of used oil to its customers. It owns a fleet of about 25 transportation trucks. The Company operates used motor oil processing plants in Houston, Texas, Port Arthur, Texas, Marrero, Louisiana, and Columbus, Ohio.

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.

Vertex Energy Inc has a Value Score of 82, which is considered to be undervalued.

Vertex Energy Inc’s price-to-book ratio is higher than its peers. This could make Vertex Energy Inc less attractive for value investors when compared to the industry median at 2.02.

You can read more about Vertex 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.

Other Oil & Gas - Refining and Marketing 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 - Refining and Marketing stocks as well as other industrys.

Choosing Which of the 4 Best Oil & Gas - Refining and Marketing 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.

• CVR Energy, Inc. stock has a Value Grade of A.
• Delek US Holdings Inc stock has a Value Grade of B.
• Par Pacific Holdings Inc stock has a Value Grade of A.
• Vertex Energy Inc 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 - Refining and Marketing 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 - Refining and Marketing Stocks

Want to learn more about Oil & Gas - Refining and Marketing 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 - Refining and Marketing Stocks for Wednesday, February 21
• 4 Undervalued Oil & Gas - Refining and Marketing Stocks for Tuesday, February 20
• Why Par Pacific Holdings Inc’s (PARR) Stock Is Down 4.55%
• Why Western Midstream Partners LP’s (WES) Stock Is Up 5.69%

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