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.

Click the button below to learn more about A+ Investor and subscribe today.

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 Thursday, May 23, 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.

Crossamerica Partners LP’s Value Grade

Value Grade:

CrossAmerica Partners LP is a wholesale distributor of motor fuels, convenience store operator, and owner and lessee of real estate used in the retail distribution of motor fuels. The Company operates through two segments: Wholesale, and Retail. The Wholesale segment includes the wholesale distribution of motor fuel to lessee dealers and independent dealers. The Retail segment includes the retail sale of motor fuel at retail sites operated by commission agents and the sale of convenience merchandise items and the retail sale of motor fuel at company operated sites. The Company distributes motor fuel on a wholesale basis to approximately 1,700 sites located in 34 states. The Company owns or leases approximately 1,100 sites, of which it operates 295 as company operated sites. The Company distributes branded motor fuel under the Exxon, Mobil, BP, Shell, Sunoco, Valero, Gulf, Citgo, Marathon, and Phillips 66 brands to its customers.

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.

Crossamerica Partners LP has a Value Score of 78, which is considered to be undervalued.

When you look at Crossamerica Partners LP’s price-to-sales ratio at 0.17 compared to the industry median at 0.30, this company has a lower price relative to revenue compared to its peers. This could make Crossamerica Partners LP’s stock more attractive for value investors.

Crossamerica Partners LP’s price-earnings ratio is 31.99 compared to the industry median at 11.11. This means it has a higher share price relative to earnings compared to its peers. This could make Crossamerica Partners LP less attractive for value investors.

Now, let’s assess Crossamerica Partners LP’s EV/EBITDA ratio, also known as enterprise multiple. At 11.0, when compared to the industry median of 6.5, the company may be considered overvalued 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. Crossamerica Partners LP’s shareholder yield is higher than its industry median ratio of 6.23%. 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.

Lastly, let’s take a look at Crossamerica Partners LP’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Crossamerica Partners LP’s price-to-free-cash-flow ratio is lower than its industry median ratio of 10.99. This could make Crossamerica Partners LP more attractive because the lower P/FCF ratio indicates that Crossamerica Partners LP 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.

Icahn Enterprises LP’s Value Grade

Value Grade:

Icahn Enterprises L.P. is a diversified holding company, which owns subsidiaries engaged in operating businesses: Investment, Energy, Automotive, Food Packaging, Real Estate, Home Fashion and Pharma. The Investment segment comprises various private investment funds. It conducts its Energy segment through its own subsidiary, CVR Energy, Inc. The Automotive segment is engaged in providing a full range of automotive repair and maintenance services, along with the sale of any installed parts or materials related to automotive services to its customers, as well as sales of automotive aftermarket parts and retailed merchandise. Its Real Estate segment consists of investment properties which includes land, retail, office and industrial properties leased to corporate tenants, the development and sale of single-family homes and others. It conducts its Pharma segment through its subsidiary, Vivus LLC. It conducts its Home Fashion segment through its subsidiary, WestPoint Home 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.

Icahn Enterprises LP has a Value Score of 64, which is considered to be undervalued.

Icahn Enterprises LP’s price-to-book ratio is lower than its peers. This could make Icahn Enterprises LP more attractive for value investors when compared to the industry median at 1.93.

You can read more about Icahn Enterprises 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.

Marathon Petroleum Corp’s Value Grade

Value Grade:

Marathon Petroleum Corporation is an integrated, downstream energy company. The Company operates through two segments: Refining & Marketing and Midstream. The Refining & Marketing segment refines crude oil and other feedstocks, including renewable feedstocks, at its refineries in the Gulf Coast, Mid-Continent and West Coast regions of the United States. The Company sells refined products to wholesale marketing customers domestically and internationally, to buyers on the spot market, to independent entrepreneurs who operate primarily Marathon branded outlets and through long-term supply contracts with direct dealers who operate locations mainly under the ARCO brand. The Midstream segment gathers, transports, stores and distributes crude oil, refined products, including renewable diesel, and other hydrocarbon-based products principally for the Refining & Marketing segment via refining logistics assets, pipelines, terminals, towboats and barges, 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.

Marathon Petroleum Corp has a Value Score of 90, which is considered to be undervalued.

Marathon Petroleum Corp’s price-earnings ratio is 8.8 compared to the industry median at 11.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Marathon Petroleum Corp more attractive for value investors.

Marathon Petroleum Corp’s price-to-book ratio is lower than its peers. This could make Marathon Petroleum Corp more attractive for value investors when compared to the industry median at 1.93.

You can read more about Marathon Petroleum 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.

World Kinect Corporation’s Value Grade

Value Grade:

World Kinect Corporation is a global energy management company. The Company is engaged in offering fulfillment and related services across the aviation, marine, and land-based transportation sectors. It also supplies natural gas and power in the United States and Europe along with a suite of other sustainability-related products and services. Its segments include Aviation, Land and Marine. Its Aviation segment provides aviation-related service offerings, which include fuel management, price risk management, ground handling, 24/7 global dispatch services, and trip planning services, including flight planning and scheduling, weather reports and overflight permits. Its Land segment offers fuel, lubricants, heating oil, and related products and services to commercial, industrial, residential and government customers, as well as retail petroleum operators. Its Marine segment markets fuel, lubricants, and related products and services to a base of marine customers.

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.

World Kinect Corporation has a Value Score of 89, which is considered to be undervalued.

World Kinect Corporation’s price-earnings ratio is 26.6 compared to the industry median at 11.1. This means that it has a higher price relative to its earnings compared to its peers. This makes World Kinect Corporation less attractive for value investors.

World Kinect Corporation’s price-to-book ratio is higher than its peers. This could make World Kinect Corporation less attractive for value investors when compared to the industry median at 1.93.

You can read more about World Kinect Corporation’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.

• Crossamerica Partners LP stock has a Value Grade of B.
• Icahn Enterprises LP stock has a Value Grade of B.
• Marathon Petroleum Corp stock has a Value Grade of A.
• World Kinect Corporation 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 Thursday, May 23
• 3 Undervalued Oil & Gas - Refining and Marketing Stocks for Wednesday, May 22
• 3 Undervalued Oil & Gas - Refining and Marketing Stocks for Tuesday, May 21
• 3 Undervalued Oil & Gas - Refining and Marketing Stocks for Monday, May 20

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.