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 – Refining and Marketing 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 – Refining and Marketing 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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3 Undervalued Oil & Gas – Refining and Marketing 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 – Refining and Marketing industry for Thursday, September 26, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Oil & Gas – Refining and Marketing industry median.
| Company | Ticker | Price/Sales | Price/Earnings | EV/EBITDA | Shareholder Yield | Price/Book Value | Price/Free Cash Flow | Value Grade |
| Blue Dolphin Energy Company | BDCO | 0.17 | 4.0 | 4.2 | 0.0% | 1.53 | na | A |
| Phillips 66 | PSX | 0.36 | 11.1 | 10.0 | 10.5% | 1.86 | 23.9 | B |
| YPF SA (ADR) | YPF | 0.73 | na | 4.9 | (0.1%) | 0.89 | 72.3 | B |
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.
Blue Dolphin Energy Company’s Value Grade
Value Grade:
A
B
C
D
F
81-100
Deep
Value
61-80
Value
41-60
Average
21-40
Expensive
0-20
Ultra
Expensive
| Metric | Score | BDCO | Industry Median |
| Price/Sales | 7 | 0.17 | 0.25 |
| Price/Earnings | 4 | 4.0 | 8.5 |
| EV/EBITDA | 12 | 4.2 | 6.0 |
| Shareholder Yield | 48 | 0.0% | 5.2% |
| Price/Book Value | 46 | 1.53 | 1.51 |
| Price/Free Cash Flow | na | na | 10.3 |
Blue Dolphin Energy Company (Blue Dolphin) is an independent downstream energy company operating in the Gulf Coast region of the United States. The Company’s operations primarily consist of a light sweet-crude, approximately 15,000 barrels per day (bpd) crude distillation tower, and approximately 1.25 million bbls of petroleum storage tank capacity in Nixon, Texas. The Company’s segments include refinery operations, and tolling and terminaling services. Its refinery operations business segment consists of a light sweet-crude, 15,000-bpd crude distillation tower, petroleum storage tanks, loading and unloading facilities, and approximately 56 acres of land. Its tolling and terminaling services segment includes petroleum storage tanks and loading and unloading facilities. Its subsidiaries include Blue Dolphin Petroleum Company, Blue Dolphin Pipe Line Company, and Blue Dolphin Exploration Company.
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.
Blue Dolphin Energy Company has a Value Score of 92, which is considered to be undervalued.
When you look at Blue Dolphin Energy Company’s price-to-sales ratio at 0.17 compared to the industry median at 0.25, this company has a lower price relative to revenue compared to its peers. This could make Blue Dolphin Energy Company’s stock more attractive for value investors.
Blue Dolphin Energy Company’s price-earnings ratio is 3.99 compared to the industry median at 8.48. This means it has a lower share price relative to earnings compared to its peers. This could make Blue Dolphin Energy Company more attractive for value investors.
Now, let’s assess Blue Dolphin Energy Company’s EV/EBITDA ratio, also known as enterprise multiple. At 4.2, when compared to the industry median of 6.0, 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. Blue Dolphin Energy Company’s shareholder yield is lower than its industry median ratio of 5.23%. 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. Blue Dolphin Energy Company’s price-to-book ratio is higher than its industry median ratio of 1.51. This could make Blue Dolphin Energy Company less attractive to investors looking for a new addition to their portfolio.
Phillips 66’s Value Grade
Value Grade:
A
B
C
D
F
81-100
Deep
Value
61-80
Value
41-60
Average
21-40
Expensive
0-20
Ultra
Expensive
| Metric | Score | PSX | Industry Median |
| Price/Sales | 14 | 0.36 | 0.25 |
| Price/Earnings | 25 | 11.1 | 8.5 |
| EV/EBITDA | 48 | 10.0 | 6.0 |
| Shareholder Yield | 6 | 10.5% | 5.2% |
| Price/Book Value | 53 | 1.86 | 1.51 |
| Price/Free Cash Flow | 59 | 23.9 | 10.3 |
Phillips 66 is a diversified and integrated downstream energy provider that manufactures, transports and markets products that drive the global economy. The Company’s Midstream segment provides crude oil and refined petroleum product transportation, terminating and processing services, as well as natural gas and natural gas liquids (NGL) transportation, storage, fractionation, gathering, processing and marketing services, mainly in the United States. Its Chemicals segment consists of its 50% equity investment in Chevron Phillips Chemical Company LLC, which manufactures and markets petrochemicals and plastics on a worldwide basis. Its Refining segment refines crude oil and other feedstocks into petroleum products, such as gasoline, distillates and aviation fuels. Its Marketing and Specialties segment purchases for resale and markets refined products. Its Renewable Fuels segment processes renewable feedstocks into renewable products at the Rodeo Renewable Energy Complex.
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.
Phillips 66 has a Value Score of 75, which is considered to be undervalued.
Phillips 66’s price-earnings ratio is 11.1 compared to the industry median at 8.5. This means that it has a higher price relative to its earnings compared to its peers. This makes Phillips 66 less attractive for value investors.
Phillips 66’s price-to-book ratio is lower than its peers. This could make Phillips 66 more attractive for value investors when compared to the industry median at 1.51.
You can read more about Phillips 66’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.
YPF SA (ADR)’s Value Grade
Value Grade:
A
B
C
D
F
81-100
Deep
Value
61-80
Value
41-60
Average
21-40
Expensive
0-20
Ultra
Expensive
| Metric | Score | YPF | Industry Median |
| Price/Sales | 26 | 0.73 | 0.25 |
| Price/Earnings | na | na | 8.5 |
| EV/EBITDA | 15 | 4.9 | 6.0 |
| Shareholder Yield | 49 | (0.1%) | 5.2% |
| Price/Book Value | 24 | 0.89 | 1.51 |
| Price/Free Cash Flow | 90 | 72.3 | 10.3 |
YPF Sociedad Anonima 
(YPF) is an energy company. The Company is operating a fully integrated oil and gas chain. The Company operates through the segments, including Exploration and Production, Downstream, and Corporate and Other. The Company’s Exploration and Production segment includes exploration and production activities, natural gas and crude oil purchases, sales of natural gas, and to a lesser extent crude oil, to third parties and intersegment sales of crude oil, natural gas and its byproducts. The Company’s Downstream segment is engaged in the refining, transport, purchase of crude oil and natural gas from third parties and intersegment sales, and marketing of crude oil, natural gas, refined products, petrochemicals, electric power generation and natural gas distribution. The Company’s Corporate and Other segment carries out other activities.
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.
YPF SA (ADR) has a Value Score of 63, which is considered to be undervalued.
YPF SA (ADR)’s price-to-book ratio is higher than its peers. This could make YPF SA (ADR) less attractive for value investors when compared to the industry median at 1.51.
You can read more about YPF 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.
Other Oil & Gas – Refining and Marketing 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 – Refining and Marketing stocks as well as other industrys.
Choosing Which of the 3 Best Oil & Gas – Refining and Marketing 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.
- Blue Dolphin Energy Company stock has a Value Grade of A.
- Phillips 66 stock has a Value Grade of B.
- YPF SA (ADR) stock has a Value Grade of B.
Now that you have a bit more background about each of the 3 undervalued stocks in the Oil & Gas – Refining and Marketing 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 – Refining and Marketing Stocks
Want to learn more about Oil & Gas – Refining and Marketing 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.
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.
