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 & 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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5 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 5 undervalued stocks in the Oil, Gas & Consumable Fuels industry for Tuesday, October 08, 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.

Adams Resources & Energy, Inc.’s Value Grade

Value Grade:

Adams Resources & Energy, Inc., through its subsidiaries, primarily engages in the marketing, transportation, terminalling, and storage of crude oil and other related products in the United States. The company operates through four segments: Crude Oil Marketing, Transportation, Pipeline and Storage, and Logistics and Repurposing. It purchases and sells crude oil to refiners and other customers primarily onshore in Texas, North Dakota, Michigan, Wyoming, Colorado, and Louisiana; owns and operates a fleet of 164 tractor-trailer rigs; and maintains pipeline inventory locations and injection stations. The company also transports liquid chemicals, pressurized gases, asphalt, and dry bulk on a hire basis in the United States, Canada, and Mexico; and operates truck terminals in Houston, Corpus Christi, Nederland, Freeport, Baton Rouge, St. Rose, Sterlington, Jacksonville, Tampa, Augusta, Mobile, Charlotte, Cincinnati, South Charleston, Memphis, East St. Louis, and Joliet. In addition, it operates crude oil and condensate pipeline system, which connects the Eagle Ford Basin to the Gulf Coast waterborne market; and transports crude oil, condensate, fuels, oils, and other petroleum products on a for hire basis in the Eagle Ford basin. The company was founded in 1947 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.

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

When you look at Adams Resources & Energy, Inc.’s price-to-sales ratio at 0.02 compared to the industry median at 1.79, this company has a lower price relative to revenue compared to its peers. This could make Adams Resources & Energy, Inc.’s stock more attractive for value investors.

Now, let’s assess Adams Resources & Energy, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 3.7, 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. Adams Resources & Energy, Inc.’s shareholder yield is lower than its industry median ratio of 4.30%. 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. Adams Resources & Energy, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.42. This could make Adams Resources & Energy, Inc. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Adams Resources & Energy, Inc.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Adams Resources & Energy, Inc.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 15.20. This could make Adams Resources & Energy, Inc. more attractive because the lower P/FCF ratio indicates that Adams Resources & Energy, 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.

Peabody Energy Corporation’s Value Grade

Value Grade:

Peabody Energy Corporation engages in coal mining business in the United States, Japan, Taiwan, Australia, India, Brazil, Belgium, Chile, France, Indonesia, China, Vietnam, South Korea, Germany, and internationally. The company operates through Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal, and Corporate and Other segments. It is involved in the mining, preparation, and sale of thermal coal primarily to electric utilities; mining bituminous and sub-bituminous coal deposits; low sulfur and high British thermal unit thermal coal; and mining metallurgical coal, such as hard coking coal, semi-hard coking coal, semi-soft coking coal, and pulverized coal injection coal. The company supplies coal primarily to electricity generators, industrial facilities, and steel manufacturers. It also engages in marketing and brokering of coal from other coal producers; trading of coal and freight-related contracts, as well as provides transportation-related services. The company was founded in 1883 and is headquartered in Saint Louis, Missouri.

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.

Peabody Energy Corporation has a Value Score of 98, which is considered to be undervalued.

Peabody Energy Corporation’s price-earnings ratio is 6.8 compared to the industry median at 11.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Peabody Energy Corporation more attractive for value investors.

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

You can read more about Peabody Energy 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.

Chord Energy Corporation’s Value Grade

Value Grade:

Chord Energy Corporation operates as an independent exploration and production company in the United States. It acquires, explores, develops, and produces crude oil, natural gas, and natural gas liquids in the Williston Basin. The company sells its products to refiners, marketers, and other purchasers that have access to nearby pipeline and rail facilities. The company was formerly known as Oasis Petroleum Inc. and changed its name to Chord Energy Corporation in July 2022. Chord Energy Corporation was founded in 2007 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.

Chord Energy Corporation has a Value Score of 67, which is considered to be undervalued.

Chord Energy Corporation’s price-earnings ratio is 6.7 compared to the industry median at 11.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Chord Energy Corporation more attractive for value investors.

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

You can read more about Chord Energy 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.

Okeanis Eco Tankers Corp.’s Value Grade

Value Grade:

Okeanis Eco Tankers Corp., a shipping company, owns and operates tanker vessels worldwide. It operates a fleet of 14 tanker vessels comprising six modern Suezmax tankers and eight modern VLCC tankers focusing on the transportation of crude oil. The company was incorporated in 2018 and is based in Neo Faliro, Greece.

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.

Okeanis Eco Tankers Corp. has a Value Score of 86, which is considered to be undervalued.

Okeanis Eco Tankers Corp.’s price-earnings ratio is 9.4 compared to the industry median at 11.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Okeanis Eco Tankers Corp. more attractive for value investors.

Okeanis Eco Tankers Corp.’s price-to-book ratio is lower than its peers. This could make Okeanis Eco Tankers Corp. more attractive for value investors when compared to the industry median at 1.42.

You can read more about Okeanis Eco Tankers 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.

Plains All American Pipeline, L.P.’s Value Grade

Value Grade:

Plains All American Pipeline, L.P., through its subsidiaries, engages in the pipeline transportation, terminaling, storage, and gathering of crude oil and natural gas liquids (NGL) in the United States and Canada. The company operates through two segments, Crude Oil and NGL. The Crude Oil segment offers gathering and transporting crude oil through pipelines, gathering systems, trucks, and on barges or railcars. This segment provides terminaling, storage, and other facilities-related services, as well as merchant activities. The NGL segment is involved in natural gas processing and NGL fractionation, storage, transportation, and terminaling. This segment also includes ethane, propane, normal butane, iso-butane, and natural gasoline derived from natural gas production and processing activities, as well as crude oil refining processes. Its NGL components are used for various applications, such as heating, engine, and industrial fuels. The company was founded in 1981 and is headquartered in Houston, Texas. Plains All American Pipeline, L.P. operates as a subsidiary of Plains GP Holdings, L.P.

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.

Plains All American Pipeline, L.P. has a Value Score of 85, which is considered to be undervalued.

Plains All American Pipeline, L.P.’s price-earnings ratio is 16.0 compared to the industry median at 11.5. This means that it has a higher price relative to its earnings compared to its peers. This makes Plains All American Pipeline, L.P. less attractive for value investors.

Plains All American Pipeline, L.P.’s price-to-book ratio is higher than its peers. This could make Plains All American Pipeline, L.P. less attractive for value investors when compared to the industry median at 1.42.

You can read more about Plains All American Pipeline, L.P.’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 5 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.

• Adams Resources & Energy, Inc. stock has a Value Grade of A.
• Peabody Energy Corporation stock has a Value Grade of A.
• Chord Energy Corporation stock has a Value Grade of B.
• Okeanis Eco Tankers Corp. stock has a Value Grade of A.
• Plains All American Pipeline, L.P. stock has a Value Grade of A.

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

• 5 Undervalued Oil, Gas & Consumable Fuels Stocks for Tuesday, October 08
• 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

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