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 & Consumable Fuels 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 & Consumable Fuels 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 & Consumable Fuels 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 & Consumable Fuels industry for Monday, October 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 & Consumable Fuels 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.

Barnwell Industries, Inc.’s Value Grade

Value Grade:

Barnwell Industries, Inc. acquires, develops, produces, and sells oil and natural gas in Canada. The company operates through three segments: Oil and Natural Gas, Land Investment, and Contract Drilling. It also acquires and develops crude oil and natural gas assets in the province of Alberta, as well as invests in land interests in Hawaii. In addition, the company owns and operates threes water well drilling rigs, two pump rigs, and other ancillary drilling and pump equipment; and drills water and water monitoring wells of varying depths. Further, it installs and repairs water pumping systems; and distributes trillium flow technologies. Barnwell Industries, Inc. was incorporated in 1956 and is based in Honolulu, Hawaii.

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.

Barnwell Industries, Inc. has a Value Score of 73, which is considered to be undervalued.

When you look at Barnwell Industries, Inc.’s price-to-sales ratio at 0.92 compared to the industry median at 1.79, this company has a lower price relative to revenue compared to its peers. This could make Barnwell Industries, Inc.’s stock more attractive for value investors.

Now, let’s assess Barnwell Industries, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 4.3, when compared to the industry median of 5.8, 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. Barnwell Industries, Inc.’s shareholder yield is lower than its industry median ratio of 4.40%. 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. Barnwell Industries, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.42. This could make Barnwell Industries, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Barnwell Industries, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Barnwell Industries, Inc.’s price-to-free-cash-flow ratio is higher than its industry median ratio of 15.45. This could make Barnwell Industries, Inc. less attractive because the higher P/FCF ratio indicates that Barnwell Industries, 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.

Cheniere Energy, Inc.’s Value Grade

Value Grade:

Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was incorporated in 1983 and is headquartered in Houston, Texas.

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.

Cheniere Energy, Inc. has a Value Score of 67, which is considered to be undervalued.

Cheniere Energy, Inc.’s price-earnings ratio is 10.0 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 Cheniere Energy, Inc. more attractive for value investors.

Cheniere Energy, Inc.’s price-to-book ratio is lower than its peers. This could make Cheniere Energy, Inc. more attractive for value investors when compared to the industry median at 1.42.

You can read more about Cheniere 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.

Mach Natural Resources LP’s Value Grade

Value Grade:

Mach Natural Resources LP, an independent upstream oil and gas company, focuses on the acquisition, development, and production of oil, natural gas, and natural gas liquids reserves in the Anadarko Basin region of Western Oklahoma, Southern Kansas, and the panhandle of Texas. It also owns a portfolio of midstream assets, as well as owns plants and water infrastructure. The company was incorporated in 2023 and is headquartered in Oklahoma City, Oklahoma.

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.

Mach Natural Resources LP has a Value Score of 97, which is considered to be undervalued.

Mach Natural Resources LP’s price-to-book ratio is higher than its peers. This could make Mach Natural Resources LP less attractive for value investors when compared to the industry median at 1.42.

You can read more about Mach Natural Resources 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.

PBF Energy Inc.’s Value Grade

Value Grade:

PBF Energy Inc., through its subsidiaries, engages in refining and supplying petroleum products. The company operates in two segments, Refining and Logistics. It produces gasoline, ultra-low-sulfur diesel, heating oil, diesel fuel, jet fuel, lubricants, petrochemicals, and asphalt, as well as unbranded transportation fuels, petrochemical feedstocks, blending components, and other petroleum products from crude oil. The company sells its products in Northeast, Midwest, Gulf Coast, and West Coast of the United States, as well as in other regions of the United States, Canada, Mexico, and internationally. It is also involved in the provision of various rail, truck, and marine terminaling services, as well as pipeline transportation and storage services. The company was founded in 2008 and is based in Parsippany, New Jersey.

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.

PBF Energy Inc. has a Value Score of 99, which is considered to be undervalued.

PBF Energy Inc.’s price-earnings ratio is 5.3 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 PBF Energy Inc. more attractive for value investors.

PBF Energy Inc.’s price-to-book ratio is higher than its peers. This could make PBF Energy Inc. less attractive for value investors when compared to the industry median at 1.42.

You can read more about PBF 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.

Talos Energy Inc.’s Value Grade

Value Grade:

Talos Energy Inc., through its subsidiaries, engages in the exploration and production of oil, natural gas, and natural gas liquids in the United States and Mexico. It also engages in the development of carbon capture and sequestration. Talos Energy Inc. was founded in 2011 and is headquartered in Houston, Texas.

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.

Talos Energy Inc. has a Value Score of 62, which is considered to be undervalued.

Talos Energy Inc.’s price-to-book ratio is higher than its peers. This could make Talos Energy Inc. less attractive for value investors when compared to the industry median at 1.42.

You can read more about Talos 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.

Transportadora de Gas del Sur S.A.’s Value Grade

Value Grade:

Transportadora de Gas del Sur S.A. engages in transportation of natural gas, and production and commercialization of natural gas liquids in Argentina and internationally. The company operates through four segments: Natural Gas Transportation Services; Liquids Production and Commercialization; Midstream; and Telecommunications. The Natural Gas Transportation segment transports natural gas through pipeline system to distribution companies, power plants, and industrial customers. It provides operation and maintenance services for the natural gas transportation facilities. The Liquids Production and Commercialization segment produces and commercializes natural gas liquids, such as ethane, liquid petroleum gas, natural gasoline, propane, and butane. This segment offers certain related services comprising reception, storage, and dispatch of the liquids. The Midstream segment provides natural gas conditioning services; treatment, removal of impurities and natural gas compression, including the collection and transport of natural gas; and inspection and maintenance of pipelines and compressor plants services. In addition, this segment offers steam generation for electricity production and management services for expansion works and steam generation for the production of electricity. The Telecommunications segment offers data transmission services through a network of digital terrestrial radio relay. It serves residential, commercial, industrial, and electric power generation end users. The company was incorporated in 1992 and is headquartered in Buenos Aires, Argentina. Transportadora de Gas del Sur S.A. is a subsidiary of Compañía de Inversiones de Energía S.A.

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.

Transportadora de Gas del Sur S.A. has a Value Score of 79, which is considered to be undervalued.

Transportadora de Gas del Sur S.A.’s price-earnings ratio is 128.8 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 Transportadora de Gas del Sur S.A. less attractive for value investors.

Transportadora de Gas del Sur S.A.’s price-to-book ratio is higher than its peers. This could make Transportadora de Gas del Sur S.A. less attractive for value investors when compared to the industry median at 1.42.

You can read more about Transportadora de Gas del Sur S.A.’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 & Consumable Fuels 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 & Consumable Fuels stocks as well as other industrys.

Choosing Which of the 6 Best Oil, Gas & Consumable Fuels 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.

• Barnwell Industries, Inc. stock has a Value Grade of B.
• Cheniere Energy, Inc. stock has a Value Grade of B.
• Mach Natural Resources LP stock has a Value Grade of A.
• PBF Energy Inc. stock has a Value Grade of A.
• Talos Energy Inc. stock has a Value Grade of B.
• Transportadora de Gas del Sur S.A. 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 & Consumable Fuels 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 & Consumable Fuels Stocks

Want to learn more about Oil, Gas & Consumable Fuels 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 & Consumable Fuels Stocks for Monday, October 07
• 6 Undervalued Oil, Gas & Consumable Fuels Stocks for Friday, October 04
• 4 Undervalued Oil, Gas & Consumable Fuels Stocks for Thursday, October 03
• 3 Undervalued Oil & Gas - Refining and Marketing Stocks for Tuesday, October 01

AAII Disclaimer

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