Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 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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6 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 6 undervalued stocks in the Oil & Gas - Exploration and Production industry for Monday, March 11, 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.

Baytex Energy Corp’s Value Grade

Value Grade:

Baytex Energy Corp. is a Canada-based energy company. The Company is engaged in the acquisition, development and production of crude oil and natural gas in the Western Canadian Sedimentary Basin and in the Eagle Ford in the United States. Its crude oil and natural gas operations are organized into three main operating areas: Light Oil USA (Eagle Ford), Light Oil Canada (Pembina Duvernay / Viking) and Heavy Oil Canada (Peace River / Peavine / Lloydminster). Its Eagle Ford assets are located in the core of the liquids-rich Eagle Ford shale in South Texas. The Eagle Ford shale covers approximately 162,000 net acres of crude oil operations. Its Viking assets are located in the Dodsland area in southwest Saskatchewan and in the Esther area of southeastern Alberta. It also holds 100% working interest land position in the East Duvernay resource play in central Alberta.

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.

Baytex Energy Corp has a Value Score of 82, which is considered to be undervalued.

When you look at Baytex Energy Corp’s price-to-sales ratio at 0.98 compared to the industry median at 2.10, this company has a lower price relative to revenue compared to its peers. This could make Baytex Energy Corp’s stock more attractive for value investors.

Now, let’s assess Baytex Energy Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 3.0, 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. Baytex Energy Corp’s shareholder yield is lower than its industry median ratio of 2.14%. 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. Baytex Energy Corp’s price-to-book ratio is lower than its industry median ratio of 1.29. This could make Baytex Energy Corp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Baytex Energy Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Baytex Energy Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 8.45. This could make Baytex Energy Corp more attractive because the lower P/FCF ratio indicates that Baytex Energy 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.

Crescent Energy Co’s Value Grade

Value Grade:

Crescent Energy Company is an independent energy company. The Company is engaged in the acquiring and developing a portfolio of energy assets. Its asset bases include oil and natural gas assets in onshore United States basins, such as the Eagle Ford, Rockies, Barnett, Permian, and Mid-Con. The Company has a portfolio of assets in various regions across the United States in approximately 48 states, primarily focused on Texas and the Rockies. Its portfolio includes oil and natural gas assets, and operations are located onshore in the United States basins, such as the Eagle Ford, Rockies, Barnett, Permian, and Mid-Con. The Company seeks to invest in energy assets and deliver operations.

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.

Crescent Energy Co has a Value Score of 67, which is considered to be undervalued.

Crescent Energy Co’s price-earnings ratio is 27.9 compared to the industry median at 8.4. This means that it has a higher price relative to its earnings compared to its peers. This makes Crescent Energy Co less attractive for value investors.

Crescent Energy Co’s price-to-book ratio is higher than its peers. This could make Crescent Energy Co less attractive for value investors when compared to the industry median at 1.29.

You can read more about Crescent Energy Co’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.

EOG Resources Inc’s Value Grade

Value Grade:

EOG Resources, Inc. is a crude oil and natural gas exploration and production company. It explores, develops, produces, and markets crude oil, natural gas liquids (NGLs) and natural gas primarily in major producing basins in the United States, the Republic of Trinidad and Tobago (Trinidad) and, from time to time, selects other international areas. Its operations are located in the basins of the United States with a focus on crude oil and, to a lesser extent, natural gas plays. It is focused on the Wolfcamp, Bone Spring, and Leonard plays. The South Texas area includes its Eagle Ford play and its Dorado gas play. It holds approximately 535,000 total net acres in the Eagle Ford play and approximately 160,000 net acres in the Dorado gas play. In Trinidad, the Company, through its subsidiaries, including EOG Resources Trinidad Limited, holds interests in the exploration and production licenses covering the South East Coast Consortium (SECC) Block, Pelican and Banyan Fields, 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.

EOG Resources Inc has a Value Score of 70, which is considered to be undervalued.

EOG Resources Inc’s price-earnings ratio is 9.1 compared to the industry median at 8.4. This means that it has a higher price relative to its earnings compared to its peers. This makes EOG Resources Inc less attractive for value investors.

EOG Resources Inc’s price-to-book ratio is lower than its peers. This could make EOG Resources Inc more attractive for value investors when compared to the industry median at 1.29.

You can read more about EOG Resources 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.

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 87, which is considered to be undervalued.

Kolibri Global Energy Inc’s price-earnings ratio is 5.9 compared to the industry median at 8.4. 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 1.29.

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.

Northern Oil and Gas Inc’s Value Grade

Value Grade:

Northern Oil and Gas, Inc. is a real asset company that focuses on acquiring and investing in non-operated minority working and mineral interests in the hydrocarbon producing basins within the contiguous United States. Its principal business is crude oil and natural gas exploration, development, and production with operations in the United States. Its 300,000-acre portfolio is distributed across the Williston, Permian, and Appalachia Basins. Its portfolio comprises about 300,000 acres of low-breakeven lands with over 10,000 wells. Diversified by basin and across commodity type, its wells are operated by over 100 public and private operators. It primarily engages in oil and natural gas exploration and production by participating on a proportionate basis alongside third-party interests in wells drilled and completed in spacing units that include its acreage. In addition, it acquires wellbore-only working interests in wells. It also owns the Utica and Northern Delaware Basin assets.

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.

Northern Oil and Gas Inc has a Value Score of 76, which is considered to be undervalued.

Northern Oil and Gas Inc’s price-earnings ratio is 3.6 compared to the industry median at 8.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Northern Oil and Gas Inc more attractive for value investors.

Northern Oil and Gas Inc’s price-to-book ratio is lower than its peers. This could make Northern Oil and Gas Inc more attractive for value investors when compared to the industry median at 1.29.

You can read more about Northern Oil and Gas 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.

North European Oil Royalty Trust’s Value Grade

Value Grade:

North European Oil Royalty Trust (the Trust) is a grantor trust which, on behalf of the owners of units of beneficial interest in the Trust (the unit owners), holds overriding royalty rights covering gas and oil production in certain concessions or leases in the Federal Republic of Germany. The rights are held under contracts with local German exploration and development subsidiaries of ExxonMobil Corp. (ExxonMobil) and the Royal Dutch/Shell Group of Companies (Royal Dutch/Shell Group). Under these contracts, the Trust receives various percentage royalties on the proceeds of the sales of certain products from the areas involved. Its royalties are received for sales of gas well gas, oil well gas, crude oil, condensate and sulfur. The Trust conducts no active business operations and is restricted to collection of income from royalty rights and distribution to unit owners of the net income after payment of administrative and related expenses.

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 European Oil Royalty Trust has a Value Score of 67, which is considered to be undervalued.

North European Oil Royalty Trust’s price-earnings ratio is 4.1 compared to the industry median at 8.4. This means that it has a lower price relative to its earnings compared to its peers. This makes North European Oil Royalty Trust more attractive for value investors.

North European Oil Royalty Trust’s price-to-book ratio is lower than its peers. This could make North European Oil Royalty Trust more attractive for value investors when compared to the industry median at 1.29.

You can read more about North European Oil Royalty Trust’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 6 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.

• Baytex Energy Corp stock has a Value Grade of A.
• Crescent Energy Co stock has a Value Grade of B.
• EOG Resources Inc stock has a Value Grade of B.
• Kolibri Global Energy Inc stock has a Value Grade of A.
• Northern Oil and Gas Inc stock has a Value Grade of B.
• North European Oil Royalty Trust stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 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.

• 6 Undervalued Oil & Gas - Exploration and Production Stocks for Monday, March 11
• 4 Undervalued Oil & Gas - Exploration and Production Stocks for Friday, March 08
• Why Amplify Energy Corp’s (AMPY) Stock Is Down 17.73%
• 4 Undervalued Oil & Gas - Exploration and Production Stocks for Thursday, March 07

AAII Disclaimer

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