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 Tuesday, May 09, 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.

Profrac Holding Corp’s Value Grade

Value Grade:

ProFrac Holding Corp. is a vertically integrated energy services company. The Company is engaged in providing hydraulic fracturing, completion services and other complementary products and services to upstream oil and gas companies engaged in the exploration and production (E&P;) of North American unconventional oil and natural gas resources. It provides in-basin sand in North America. Its four mines produces approximately 10.4 million tons per year of proppant. Its solutions to the North American Oil and Gas industry include project design and manufacturing, sand and chemical supply, logistics coordination and data reporting, automation technology, emissions reduction, and additive manufacturing. The Company also provides pressure pumping services with operations in the Rockies and Eagle Ford. It operates frac fleets totaling 204,500 hydraulic horsepower that offer opportunity for upgrades through the additions of dynamic gas blending (DGB) engines and engine idle reduction systems.

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.

Profrac Holding Corp has a Value Score of 74, which is considered to be undervalued.

When you look at Profrac Holding Corp’s price-to-sales ratio at 0.23 compared to the industry median at 0.69, this company has a lower price relative to revenue compared to its peers. This could make Profrac Holding Corp’s stock more attractive for value investors.

Profrac Holding Corp’s price-earnings ratio is 5.17 compared to the industry median at 17.37. This means it has a lower share price relative to earnings compared to its peers. This could make Profrac Holding Corp more attractive for value investors.

Now, let’s assess Profrac Holding Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 6.6, when compared to the industry median of 8.0, 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. Profrac Holding Corp’s shareholder yield is lower than its industry median ratio of (0.51%). 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 Profrac Holding Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Profrac Holding Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 26.78. This could make Profrac Holding Corp more attractive because the lower P/FCF ratio indicates that Profrac Holding 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.

Dmc Global Inc’s Value Grade

Value Grade:

DMC Global Inc. is an owner and operator of asset-light manufacturing businesses. It owns and operates Arcadia, DynaEnergetics and NobelClad, three asset-light manufacturing businesses that provide differentiated products and engineered solutions to segments of the construction, energy, industrial processing, and transportation markets. Arcadia supplies architectural building products, including exterior and interior framing systems, curtain walls, windows, doors, and interior partitions to the commercial construction market. DynaEnergetics designs, manufactures, and distributes engineered products utilized by the global oil and gas industry for the perforation of oil and gas wells. NobelClad is engaged in the production of explosion-welded clad metal plates for use in the construction of corrosion resistant industrial processing equipment, as well as specialized transition joints for use in construction of commuter rail cars ships, and liquified natural gas processing equipment.

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.

Dmc Global Inc has a Value Score of 63, which is considered to be undervalued.

Dmc Global Inc’s price-earnings ratio is 23.9 compared to the industry median at 17.4. This means that it has a higher price relative to its earnings compared to its peers. This makes Dmc Global Inc less attractive for value investors.

Dmc Global Inc’s price-to-book ratio is higher than its peers. This could make Dmc Global Inc less attractive for value investors when compared to the industry median at 1.15.

You can read more about Dmc Global 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.

Liberty Energy Inc’s Value Grade

Value Grade:

Liberty Energy Inc. is an integrated energy services and technology company. The Company is focused on providing hydraulic services and related technologies to onshore oil and natural gas exploration and production (E&P;) companies in North America. It offers customers hydraulic fracturing services, together with complementary services, including wireline services, proppant delivery solutions, data analytics, related goods (including its sand mine operations), and technologies. It primarily provides its services in Permian Basin, the Eagle Ford Shale, the Denver-Julesburg Basin (the DJ Basin), the Williston Basin, the San Juan Basin, the Powder River Basin, the Haynesville Shale, the South Central Oklahoma Oil Province and Sooner Trend Anadarko Canadian Kingfisher (collectively, SCOOP/STACK), the Marcellus Shale, the Utica Shale, and the Western Canadian Sedimentary Basin. Its hydraulic fracturing fleet consists of mobile hydraulic fracturing units and other auxiliary heavy equipment.

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.

Liberty Energy Inc has a Value Score of 92, which is considered to be undervalued.

Liberty Energy Inc’s price-earnings ratio is 4.0 compared to the industry median at 17.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Liberty Energy Inc more attractive for value investors.

Liberty Energy Inc’s price-to-book ratio is lower than its peers. This could make Liberty Energy Inc more attractive for value investors when compared to the industry median at 1.15.

You can read more about Liberty 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.

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 Cylinder-in-Plane (CiP) 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 88, 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 1.15.

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.

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 has over 3,716,854 horsepower in its fleet. The Company provides compression services in a number of shales 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 61, 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.

• Profrac Holding Corp stock has a Value Grade of B.
• Dmc Global Inc stock has a Value Grade of B.
• Liberty Energy Inc stock has a Value Grade of A.
• Natural Gas Services Group, Inc. stock has a Value Grade of A.
• 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 Tuesday, May 09
• 3 Undervalued Oil & Gas - Related Services and Equipment Stocks for Monday, May 08
• Why Aris Water Solutions Inc’s (ARIS) Stock Is Up 5.26%
• Why Core Laboratories N.V.’s (CLB) Stock Is Down 4.52%

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