Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 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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4 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 4 undervalued stocks in the Oil & Gas - Related Services and Equipment industry for Monday, October 30, 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.

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.

When you look at Nine Energy Service Inc’s price-to-sales ratio at 0.18 compared to the industry median at 0.82, this company has a lower price relative to revenue compared to its peers. This could make Nine Energy Service Inc’s stock more attractive for value investors.

Nine Energy Service Inc’s price-earnings ratio is 8.58 compared to the industry median at 15.55. This means it has a lower share price relative to earnings compared to its peers. This could make Nine Energy Service Inc more attractive for value investors.

Now, let’s assess Nine Energy Service Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 4.1, when compared to the industry median of 6.9, 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. Nine Energy Service Inc’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.

Lastly, let’s take a look at Nine Energy Service Inc’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Nine Energy Service Inc’s price-to-free-cash-flow ratio is lower than its industry median ratio of 24.36. This could make Nine Energy Service Inc more attractive because the lower P/FCF ratio indicates that Nine Energy Service 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.

North American Construction Group Ltd’s Value Grade

Value Grade:

North American Construction Group Ltd. is a Canada-based company, which provides heavy civil construction and mining services in Canada, the United States, and Australia. It provides a range of mining and heavy construction services to customers in the resource development and industrial construction sectors. The Company’s Heavy Construction and Mining division is engaged in hard rock and oil sands mining, overburden removal, mine site development, and mine reclamation. This division also provides constructability design reviews, budgetary cost estimates, and a range of planning and scheduling services. The Company’s Equipment Maintenance Services division offers maintenance procedures on-site, as well as in its multiple shop facilities. It provides services, such as fuel and lube servicing options, portable steaming, equipment inspections, hose manufacturing and onsite haul truck brake testing. The Company also provides heavy earthworks solutions to the mining and civil sectors.

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.

North American Construction Group Ltd has a Value Score of 63, which is considered to be undervalued.

North American Construction Group Ltd’s price-earnings ratio is 11.0 compared to the industry median at 15.6. This means that it has a lower price relative to its earnings compared to its peers. This makes North American Construction Group Ltd more attractive for value investors.

North American Construction Group Ltd’s price-to-book ratio is lower than its peers. This could make North American Construction Group Ltd more attractive for value investors when compared to the industry median at 1.33.

You can read more about North American Construction Group Ltd’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.

RPC Inc’s Value Grade

Value Grade:

RPC, Inc. acts as a holding company for several oilfield services companies that include Cudd Energy Services, Cudd Pressure Control, Thru Tubing Solutions and Patterson Services. It provides a range of oilfield services and equipment primarily to independent and oil and gas companies, which is engaged in the exploration, production and development of oil and gas properties throughout the United States, including the southwest, mid-continent, Gulf of Mexico, Rocky Mountain and Appalachian regions, and in selected international markets. Its segments include Technical Services and Support Services. Technical Services segment includes pressure pumping, downhole tools services, coiled tubing, snubbing and other oilfield related services. Support Services segment includes renting tools to its customers for use with onshore and offshore oil and gas well drilling, completion and workover activities. It is also engaged in oilfield cementing services in the Permian and Mid-Continent basins.

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.

RPC Inc has a Value Score of 74, which is considered to be undervalued.

RPC Inc’s price-earnings ratio is 7.6 compared to the industry median at 15.6. This means that it has a lower price relative to its earnings compared to its peers. This makes RPC Inc more attractive for value investors.

RPC Inc’s price-to-book ratio is lower than its peers. This could make RPC Inc more attractive for value investors when compared to the industry median at 1.33.

You can read more about RPC 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.

Mammoth Energy Services Inc’s Value Grade

Value Grade:

Mammoth Energy Services, Inc. is an integrated energy services company, which provides products and services to enable the exploration and development of North American onshore unconventional oil and natural gas reserve. The Company is also engaged in the construction and repair of the electric grid for private utilities, public investor-owned utilities and co-operative utilities through its infrastructure services businesses. It operates through four segments. Well completion services segment provides hydraulic fracturing, sand hauling and water transfer services. Infrastructure services segment provides engineering, designing, construction, upgrade, maintenance and repair services to the electrical infrastructure industry. Natural sand proppant services segment mines, processes and sells natural sand proppant used for hydraulic fracturing. Drilling services segment provides rental equipment, such as mud motors and operational tools, for both vertical and horizontal drilling.

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.

Mammoth Energy Services Inc has a Value Score of 84, which is considered to be undervalued.

Mammoth Energy Services Inc’s price-earnings ratio is 12.2 compared to the industry median at 15.6. This means that it has a lower price relative to its earnings compared to its peers. This makes Mammoth Energy Services Inc more attractive for value investors.

Mammoth Energy Services Inc’s price-to-book ratio is higher than its peers. This could make Mammoth Energy Services Inc less attractive for value investors when compared to the industry median at 1.33.

You can read more about Mammoth Energy Services 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 4 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.

• Nine Energy Service Inc stock has a Value Grade of A.
• North American Construction Group Ltd stock has a Value Grade of B.
• RPC Inc stock has a Value Grade of B.
• Mammoth Energy Services Inc stock has a Value Grade of A.

Now that you have a bit more background about each of the 4 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.

• 4 Undervalued Oil & Gas - Related Services and Equipment Stocks for Monday, October 30
• 3 Undervalued Oil & Gas - Related Services and Equipment Stocks for Friday, October 27
• Why Dril-Quip Inc’s (DRQ) Stock Is Down 5.32%
• Why Oceaneering International Inc’s (OII) Stock Is Up 4.75%

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