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 - Related Services and Equipment 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 - Related Services and Equipment 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 - Related Services and Equipment 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 - Related Services and Equipment industry for Wednesday, March 06, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Oil & Gas - Related Services and Equipment 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.

Helix Energy Solutions Group Inc’s Value Grade

Value Grade:

Helix Energy Solutions Group, Inc. is an offshore energy services company that provides specialty services to the offshore energy industry. The Company operates through four segments: Well Intervention, Robotics, Shallow Water Abandonment and Production Facilities. The Well Intervention segment provides services enabling its customers to access offshore wells for the purpose of performing production enhancement or decommissioning operations. The Robotics segment provides trenching, seabed clearance, offshore construction and inspection, repair, and maintenance (IRM) services to both the oil and gas and the renewable energy markets. The Shallow Water Abandonment segment provides offshore oilfield decommissioning and reclamation, project management, engineered solutions, intervention, and commercial diving services. The Production Facilities segment includes the Helix Producer I (the HP I), the Helix Fast Response System (the HFRS) and its ownership of oil and gas properties.

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.

Helix Energy Solutions Group Inc has a Value Score of 78, which is considered to be undervalued.

When you look at Helix Energy Solutions Group Inc’s price-to-sales ratio at 1.10 compared to the industry median at 0.78, this company has a higher price relative to revenue compared to its peers. This could make Helix Energy Solutions Group Inc’s stock less attractive for value investors.

Now, let’s assess Helix Energy Solutions Group Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 6.9, when compared to the industry median of 7.0, 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. Helix Energy Solutions Group Inc’s shareholder yield is higher than its industry median ratio of (1.03%). 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. Helix Energy Solutions Group Inc’s price-to-book ratio is lower than its industry median ratio of 1.25. This could make Helix Energy Solutions Group Inc more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Helix Energy Solutions Group Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Helix Energy Solutions Group Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 13.32. This could make Helix Energy Solutions Group Inc more attractive because the lower P/FCF ratio indicates that Helix Energy Solutions Group 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.

North American Construction Group Ltd’s Value Grade

Value Grade:

North American Construction Group Ltd. is a Canada-based company, which provides heavy civil construction and mining services in Canada, the United States, and Australia. It provides a range of mining and heavy construction services to customers in the resource development and industrial construction sectors. The Company’s Heavy Construction and Mining division is engaged in hard rock and oil sands mining, overburden removal, mine site development, and mine reclamation. This division also provides constructability design reviews, budgetary cost estimates, and a range of planning and scheduling services. The Company’s Equipment Maintenance Services division offers maintenance procedures on-site, as well as in its multiple shop facilities. It provides services, such as fuel and lube servicing options, portable steaming, equipment inspections, hose manufacturing and onsite haul truck brake testing. The Company also provides heavy earthworks solutions to the mining and civil sectors.

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.

North American Construction Group Ltd has a Value Score of 63, which is considered to be undervalued.

North American Construction Group Ltd’s price-earnings ratio is 14.2 compared to the industry median at 15.0. This means that it has a lower price relative to its earnings compared to its peers. This makes North American Construction Group Ltd more attractive for value investors.

North American Construction Group Ltd’s price-to-book ratio is lower than its peers. This could make North American Construction Group Ltd more attractive for value investors when compared to the industry median at 1.25.

You can read more about North American Construction Group 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.

Superior Drilling Products Inc’s Value Grade

Value Grade:

Superior Drilling Products, Inc. is a drilling and completion tool technology company. The Company is engaged in providing cost-saving solutions that drive production efficiencies for the oil and natural gas drilling industries. It designs, engineers, manufactures, sells, and repairs drilling and completion tools in the United States, Canada, and the Middle East. Its drilling solutions include the patented Drill-N-Ream well bore conditioning tool (Drill-N-Ream tool) and the patented Strider Drill String Oscillation System technology (Strider technology). In addition, it is a manufacturer and refurbisher of polycrystalline diamond compact (PDC) drill bits for oil field service companies. It operates a drill tool fabrication facility and manufactures solutions for the drilling industry, as well as customers? custom products for other applications. Its subsidiaries include Superior Drilling Solutions, LLC, Extreme Technologies, LLC, Meier Properties Series, LLC, and Meier Leasing, 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.

Superior Drilling Products Inc has a Value Score of 66, which is considered to be undervalued.

Superior Drilling Products Inc’s price-earnings ratio is 9.6 compared to the industry median at 15.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Superior Drilling Products Inc more attractive for value investors.

Superior Drilling Products Inc’s price-to-book ratio is lower than its peers. This could make Superior Drilling Products Inc more attractive for value investors when compared to the industry median at 1.25.

You can read more about Superior Drilling Products 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.

Solaris Oilfield Infrastructure Inc’s Value Grade

Value Grade:

Solaris Oilfield Infrastructure, Inc. provides mobile equipment that drives supply chain and execution in the completion of oil and natural gas wells. The Company designs and manufactures specialized equipment, which combined with field technician support, last mile logistics services and software solutions, which enables it to provide a service offering that helps oil and natural gas operators and their suppliers during the completion phase of well development. It services active oil and natural gas basins in the United States. It specializes in developing all electric equipment that automates the low-pressure section of oil and gas well completion sites. The Company’s sand handling service span from mobile proppant management systems to multiple types of all-electric, automated systems designed to store, move, and blend sand and fluids on the low-pressure side of well completion sites. It measures its activity based on the number of its fully utilized systems.

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.

Solaris Oilfield Infrastructure Inc has a Value Score of 92, which is considered to be undervalued.

Solaris Oilfield Infrastructure Inc’s price-earnings ratio is 10.5 compared to the industry median at 15.0. This means that it has a lower price relative to its earnings compared to its peers. This makes Solaris Oilfield Infrastructure Inc more attractive for value investors.

Solaris Oilfield Infrastructure Inc’s price-to-book ratio is higher than its peers. This could make Solaris Oilfield Infrastructure Inc less attractive for value investors when compared to the industry median at 1.25.

You can read more about Solaris Oilfield Infrastructure 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 - Related Services and Equipment 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 - Related Services and Equipment stocks as well as other industrys.

Choosing Which of the 4 Best Oil & Gas - Related Services and Equipment 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.

• Helix Energy Solutions Group Inc stock has a Value Grade of B.
• North American Construction Group Ltd stock has a Value Grade of B.
• Superior Drilling Products Inc stock has a Value Grade of B.
• Solaris Oilfield Infrastructure 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 - Related Services and Equipment 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 - Related Services and Equipment Stocks

Want to learn more about Oil & Gas - Related Services and Equipment 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 - Related Services and Equipment Stocks for Wednesday, March 06
• 5 Undervalued Oil & Gas - Related Services and Equipment Stocks for Tuesday, March 05
• Why Ranger Energy Services Inc’s (RNGR) Stock Is Up 7.47%
• 5 Undervalued Oil & Gas - Related Services and Equipment Stocks for Monday, March 04

AAII Disclaimer

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