Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 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.

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

3 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 3 undervalued stocks in the Oil & Gas - Related Services and Equipment industry for Thursday, October 26, 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 94, which is considered to be undervalued.

When you look at CGG SA (ADR)’s price-to-sales ratio at 0.50 compared to the industry median at 0.86, 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.

CGG SA (ADR)’s price-earnings ratio is 7.74 compared to the industry median at 16.19. This means it has a lower share price relative to earnings compared to its peers. This could make CGG SA (ADR) 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 6.7, 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 (0.13%). 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 1.42. 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 20.30. 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.

Dawson Geophysical Co’s Value Grade

Value Grade:

Dawson Geophysical Company is a provider of North American onshore seismic data acquisition services with operations throughout the continental United States and Canada. The Company acquires and processes two-dimensional (2-D), three-dimensional (3-D), and multi-component seismic data solely for its clients, ranging from oil and gas companies to independent oil and gas operators, as well as providers of multi-client data libraries. It provides its seismic data acquisition services primarily to providers of multi-client data libraries for use in the onshore drilling and production of oil and natural gas in the continental United States and Canada, as well as directly to onshore oil and natural gas exploration and development companies. It acquires geophysical data using 3-D seismic survey techniques. In addition to conventional 2-D and 3-D seismic surveys, it provides multi-component seismic data surveys. Multi-component surveys involve the recording of alternative seismic waves.

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.

Dawson Geophysical Co has a Value Score of 61, which is considered to be undervalued.

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

You can read more about Dawson Geophysical Co’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.

Nine Energy Service Inc’s Value Grade

Value Grade:

Nine Energy Service, Inc. is a completion services provider that targets unconventional oil and gas resource development across North American basins and abroad. The Company partners with its exploration and production (E&P;) customers to design and deploy downhole solutions and technology to prepare horizontal, multistage wells for production. It provides its comprehensive completion solutions across a diverse set of well-types, including the complex, technically demanding unconventional wells. It offers a variety of completion applications and technologies to match customer needs across the broadest addressable completions market. The Company?s well solutions range from cementing the well at the initial stages of the completion, preparing the well for stimulation, isolating all the stages of an extended reach lateral, and the drilling out of isolation tools. The Company provides services integral to the completion of unconventional wells through a range of tools and methodologies.

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.

Nine Energy Service Inc has a Value Score of 83, which is considered to be undervalued.

Nine Energy Service Inc’s price-earnings ratio is 8.8 compared to the industry median at 16.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Nine Energy Service Inc more attractive for value investors.

You can read more about Nine Energy Service 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.

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 3 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.
• Dawson Geophysical Co stock has a Value Grade of B.
• Nine Energy Service Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 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.

• 3 Undervalued Oil & Gas - Related Services and Equipment Stocks for Thursday, October 26
• 3 Undervalued Oil & Gas - Related Services and Equipment Stocks for Wednesday, October 25
• Why ChampionX Corp’s (CHX) Stock Is Down 8.00%
• Why Newpark Resources Inc’s (NR) Stock Is Up 5.61%

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.