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 - 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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5 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 5 undervalued stocks in the Oil & Gas - Related Services and Equipment industry for Thursday, March 07, 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.

Profrac Holding Corp’s Value Grade

Value Grade:

ProFrac Holding Corp. is a vertically integrated energy services company. The Company is engaged in providing hydraulic fracturing, completion services and other complementary products and services to upstream oil and gas companies engaged in the exploration and production (E&P;) of North American unconventional oil and natural gas resources. It provides in-basin sand in North America. Its four mines produces approximately 10.4 million tons per year of proppant. Its solutions to the North American Oil and Gas industry include project design and manufacturing, sand and chemical supply, logistics coordination and data reporting, automation technology, emissions reduction, and additive manufacturing. The Company also provides pressure pumping services with operations in the Rockies and Eagle Ford. It operates frac fleets totaling 204,500 hydraulic horsepower that offer opportunity for upgrades through the additions of dynamic gas blending (DGB) engines and engine idle reduction 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.

Profrac Holding Corp has a Value Score of 84, which is considered to be undervalued.

When you look at Profrac Holding Corp’s price-to-sales ratio at 0.42 compared to the industry median at 0.80, this company has a lower price relative to revenue compared to its peers. This could make Profrac Holding Corp’s stock more attractive for value investors.

Profrac Holding Corp’s price-earnings ratio is 8.67 compared to the industry median at 14.33. This means it has a lower share price relative to earnings compared to its peers. This could make Profrac Holding Corp more attractive for value investors.

Now, let’s assess Profrac Holding Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 3.7, when compared to the industry median of 7.1, 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. Profrac Holding Corp’s shareholder yield is lower than its industry median ratio of (1.07%). 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. Profrac Holding Corp’s price-to-book ratio is lower than its industry median ratio of 1.27. This could make Profrac Holding Corp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Profrac Holding Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Profrac Holding Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 13.40. This could make Profrac Holding Corp more attractive because the lower P/FCF ratio indicates that Profrac Holding Corp 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.

Koil Energy Solutions Inc’s Value Grade

Value Grade:

Koil Energy Solutions, Inc. is an energy services company, which provides equipment and support services to the energy and offshore industries. The Company?s core services and technological solutions include distribution system installation support and engineering services, umbilical terminations, loose-tube steel flying leads and related services. In addition, it supports subsea engineering, manufacturing, installation, commissioning and maintenance projects located anywhere in the world. The Company?s line of solutions is engineered and manufactured primarily for integrated, large independent, and foreign national energy companies in offshore areas throughout the world. These products are often developed in direct response to customer requests for solutions to critical needs in the field. The Company primarily serves the offshore oil and gas market. It also serves additional markets, including offshore wind, offshore wave energy, hydrogen and liquefied natural gas.

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.

Koil Energy Solutions Inc has a Value Score of 79, which is considered to be undervalued.

Koil Energy Solutions Inc’s price-to-book ratio is higher than its peers. This could make Koil Energy Solutions Inc less attractive for value investors when compared to the industry median at 1.27.

You can read more about Koil Energy Solutions 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.

KLX Energy Services Holdings Inc’s Value Grade

Value Grade:

KLX Energy Services Holdings, Inc. is a provider of oilfield services to onshore oil and natural gas exploration and production companies operating in both conventional and unconventional areas throughout the United States. It operates in three segments on a geographic basis, including the Southwest Region (the Permian Basin, Eagle Ford Shale and the Gulf Coast as well as in industrial and petrochemical facilities), the Rocky Mountains Region (the Bakken, Williston, DJ, Uinta, Powder River, Piceance and Niobrara basins) and the Northeast/Mid-Con Region (the Marcellus and Utica Shale as well as the Mid-Continent STACK and SCOOP and Haynesville Shale). Its primary services include directional drilling, coiled tubing, thru tubing, hydraulic frac rentals, fishing, pressure control, wireline, fluid pumping, flowback, testing, pressure pumping and well control services. Its primary rentals and products include hydraulic fracturing stacks, blow out preventers, tubulars, and downhole tools.

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.

KLX Energy Services Holdings Inc has a Value Score of 84, which is considered to be undervalued.

KLX Energy Services Holdings Inc’s price-earnings ratio is 2.5 compared to the industry median at 14.3. This means that it has a lower price relative to its earnings compared to its peers. This makes KLX Energy Services Holdings Inc more attractive for value investors.

KLX Energy Services Holdings Inc’s price-to-book ratio is lower than its peers. This could make KLX Energy Services Holdings Inc more attractive for value investors when compared to the industry median at 1.27.

You can read more about KLX Energy Services 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.

Nov Inc’s Value Grade

Value Grade:

NOV Inc. is an independent equipment and technology provider to the global energy industry. The Company operates through two segments: Energy Equipment, and Energy Products and Services. Its engineering knowhow, global supply chain management, manufacturing, and energy infrastructure development support provides capabilities to assist customers with energy transition advancement. It is also a geothermal equipment and technology provider, offering an array of tools and equipment specifically designed for the ultra-harsh conditions associated with geothermal development. Additionally, the Company is an equipment and technology provider for purpose-built vessels used to build, install, and maintain offshore wind towers and turbines. The Company is engaged in the development and commercialization of novel products and technologies to improve the efficiencies and economics of land and offshore-based wind, geothermal power generation, and carbon capture and sequestration.

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.

Nov Inc has a Value Score of 80, which is considered to be undervalued.

Nov Inc’s price-earnings ratio is 6.9 compared to the industry median at 14.3. This means that it has a lower price relative to its earnings compared to its peers. This makes Nov Inc more attractive for value investors.

Nov Inc’s price-to-book ratio is higher than its peers. This could make Nov Inc less attractive for value investors when compared to the industry median at 1.27.

You can read more about Nov 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.

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 67, which is considered to be undervalued.

Superior Drilling Products Inc’s price-earnings ratio is 9.5 compared to the industry median at 14.3. 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 1.27.

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.

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 5 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.

• Profrac Holding Corp stock has a Value Grade of A.
• Koil Energy Solutions Inc stock has a Value Grade of B.
• KLX Energy Services Holdings Inc stock has a Value Grade of A.
• Nov Inc stock has a Value Grade of B.
• Superior Drilling Products Inc stock has a Value Grade of B.

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

• 5 Undervalued Oil & Gas - Related Services and Equipment Stocks for Thursday, March 07
• 4 Undervalued Oil & Gas - Related Services and Equipment Stocks for Wednesday, March 06
• Why Profrac Holding Corp’s (ACDC) Stock Is Down 6.26%
• Why Ranger Energy Services Inc’s (RNGR) Stock Is Down 4.37%

AAII Disclaimer

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