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.

Latest Oil & Gas - Related Services and Equipment Stock News

Before choosing which top Oil & Gas - Related Services and Equipment stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

The fundamental outlook for the oil & gas related services & equipment sub-industry is neutral for the next 12 months. Oil prices rebounded from lows during the pandemic to all-time highs in spring of 2022. Global oil demand is expected to exceed pre-pandemic levels, but inadequate supply levels add additional stress to an already tight market. Oil producers are increasing their capital spending for 2022, paving the way for more production while driving up demand for oil services. Despite this, the industry faces challenges heading into late 2022. Labor, equipment maintenance and supplies are all getting more costly. Oil services companies are also experiencing a shortage of sand used for fracking, rigs and fracking crews.

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 Wednesday, January 18, 2023. 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.

CGG SA (ADR)’s Value Grade

Value Grade:

CGG SA (CGG) is a manufacturer of geophysical equipment. The Company provides marine, land and airborne data acquisition services, as well as a range of other geoscience services, including data imaging, geoscience and petroleum engineering consulting services, and collecting, developing and licensing geological data. Its segments include Contractual Data Acquisition; Geology, Geophysics & Reservoir (GGR); Equipment, and Non-Operated Resources. The Contractual Data Acquisition includes marine, and land and multi-physics. Its GGR segment includes the Multi-client business line and the Subsurface Imaging and Reservoir business lines (processing and imaging of geophysical data, reservoir characterization, geophysical consulting and software services, geological data library and data management solutions). The Equipment segment consists of its manufacturing and sales activities for seismic equipment. It operates through Saturno, a multi-client survey over Santos Basin Offshore Brazil.

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.

CGG SA (ADR) has a Value Score of 87, which is considered to be undervalued.

When you look at CGG SA (ADR)’s price-to-sales ratio at 0.52 compared to the industry median at 0.99, this company has a lower price relative to revenue compared to its peers. This could make CGG SA (ADR)’s stock more attractive for value investors.

Now, let’s assess CGG SA (ADR)’s EV/EBITDA ratio, also known as enterprise multiple. At 3.8, when compared to the industry median of 7.9, 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. CGG SA (ADR)’s shareholder yield is lower than its industry median ratio of (0.99%). 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. CGG SA (ADR)’s price-to-book ratio is lower than its industry median ratio of 1.54. This could make CGG SA (ADR) more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at CGG SA (ADR)’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. CGG SA (ADR)’s price-to-free-cash-flow ratio is lower than its industry median ratio of 44.99. This could make CGG SA (ADR) more attractive because the lower P/FCF ratio indicates that CGG SA (ADR) 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.

Natural Gas Services Group, Inc.’s Value Grade

Value Grade:

Natural Gas Services Group, Inc. is a provider of natural gas compression equipment and services to the energy industry. The Company manufactures, fabricates, rents, sells, and maintains natural gas compressors and flare systems for oil and natural gas production and plant facilities. It manufactures a line of compressor frames, cylinders, and parts, known as its CiP (Cylinder-in-Plane) product line. It uses finished CiP component products in the fabrication of compressor units for sale or rental by the Company or sells the finished component products to other compressor fabricators. It also designs, fabricates, sells, installs, and services, flat stacks, and related ignition and control devices for onshore and offshore incineration of gas compounds, such as hydrogen sulfide, carbon dioxide, natural gas, and liquefied petroleum gases. In addition, it provides service and maintenance on compressors in its fleet and to third parties. It also performs engine and compressor overhauls.

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.

Natural Gas Services Group, Inc. has a Value Score of 90, which is considered to be undervalued.

Natural Gas Services Group, Inc.’s price-to-book ratio is higher than its peers. This could make Natural Gas Services Group, Inc. less attractive for value investors when compared to the industry median at 1.54.

You can read more about Natural Gas Services Group, 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.

Solaris Oilfield Infrastructure Inc’s Value Grade

Value Grade:

Solaris Oilfield Infrastructure, Inc. designs and manufactures specialized equipment, which combined with field technician support, last mile logistics services and software solutions. It provides a service offering that helps oil and natural gas operators. Its equipment and services are deployed in oil and natural gas basins in the United States. It specializes in developing all-electric equipment that automates the low-pressure section of oil and gas well completion sites. Its oilfield technologies include the Solaris Mobile Proppant Management System and the Solaris Mobile Chemical Management System, which lowers completion times and costs by increasing proppant and chemical storage capacity on well sites. It owns or leases various facilities, including its corporate headquarters in Houston, Texas, a manufacturing facility in Early, Texas, and a transloading facility in Kingfisher, Oklahoma. It manufactures and assembles its systems at its manufacturing facility in Early, 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.

Solaris Oilfield Infrastructure Inc has a Value Score of 64, which is considered to be undervalued.

Solaris Oilfield Infrastructure Inc’s price-earnings ratio is 21.1 compared to the industry median at 25.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Solaris Oilfield Infrastructure Inc more attractive for value investors.

Solaris Oilfield Infrastructure Inc’s price-to-book ratio is lower than its peers. This could make Solaris Oilfield Infrastructure Inc more attractive for value investors when compared to the industry median at 1.54.

You can read more about Solaris Oilfield Infrastructure 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.

Subsea 7 SA (ADR)’s Value Grade

Value Grade:

Subsea 7 S.A. is engaged in the delivery of offshore projects and services for the energy industry. The Company provides products and services required for subsea field development, including project management, design and engineering, procurement, installation and commissioning of production facilities on the seabed and the tie-back of these facilities to fixed or floating platforms or to the shore. Its segments include Subsea and Conventional, and Renewables. The Subsea and Conventional business unit include Subsea Umbilicals, Risers and Flowlines (SURF) activities related to the engineering, procurement, installation and commissioning of complex subsea oil and gas systems in deep waters, and Conventional services, including the fabrication, installation, extension and refurbishment of fixed and floating platforms and associated pipelines in shallow water environments. The Renewables business unit comprises activities related to the delivery of fixed offshore wind farm projects.

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.

Subsea 7 SA (ADR) has a Value Score of 74, which is considered to be undervalued.

Subsea 7 SA (ADR)’s price-earnings ratio is 135.1 compared to the industry median at 25.1. This means that it has a higher price relative to its earnings compared to its peers. This makes Subsea 7 SA (ADR) less attractive for value investors.

Subsea 7 SA (ADR)’s price-to-book ratio is higher than its peers. This could make Subsea 7 SA (ADR) less attractive for value investors when compared to the industry median at 1.54.

You can read more about Subsea 7 SA (ADR)’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.

Usa Compression Partners LP’s Value Grade

Value Grade:

USA Compression Partners, LP is a provider of natural gas compression services. The Company provides compression services to its customers primarily in connection with infrastructure applications, including both allowing for the processing and transportation of natural gas through the domestic pipeline system and crude oil production through artificial lift processes. It engineers, designs, operates, services and repairs its compression units and maintains related support inventory and equipment. The Company also provides compression services in mature conventional basins, including gas lift applications on crude oil wells targeted by horizontal drilling techniques. It had over 3,689,018 horsepower in its fleet. The Company provides compression services in a number of shale plays throughout the United States, including the Utica, Marcellus, Permian Basin, Delaware Basin, Eagle Ford, Mississippi Lime, Granite Wash, Woodford, Barnett, Haynesville, Niobrara and Fayetteville shales.

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.

Usa Compression Partners LP has a Value Score of 64, which is considered to be undervalued.

You can read more about Usa Compression Partners 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.

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.

• CGG SA (ADR) stock has a Value Grade of A.
• Natural Gas Services Group, Inc. stock has a Value Grade of A.
• Solaris Oilfield Infrastructure Inc stock has a Value Grade of B.
• Subsea 7 SA (ADR) stock has a Value Grade of B.
• Usa Compression Partners LP 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 Wednesday, January 18
• Which Is a Better Investment, Nov Inc or Usa Compression Partners LP Stock?
• Which Is a Better Investment, RPC Inc or Usa Compression Partners LP Stock?
• Which Is a Better Investment, TechnipFMC PLC or Usa Compression Partners LP Stock?

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