Energy Sector: Value Investing Analysis
About the Energy Sector
Companies that produce or refine oil and gas, oilfield-services and equipment companies, and pipeline operators. This sector also includes companies that mine thermal coal and uranium. Companies in this sector include BP, ExxonMobil, Royal Dutch Shell, and China Shenhua Energy.
The Energy sector groups related businesses that share similar economic characteristics, market dynamics, and competitive forces. By analyzing stocks within this sector, you can compare companies on a more level playing field—making it easier to identify which businesses offer the best value for your investment dollars.
Understanding sector performance helps you evaluate whether individual stocks are cheap or expensive relative to their peers. A P/E ratio that looks high in one sector might be a bargain in another. This context is essential for value investors seeking to calculate realistic expected returns.
Energy Stocks: Value Analysis
Below are the stocks we track in the Energy sector, with key value investing metrics. If you have special knowledge about this sector, you have an advantage—use these metrics to find stocks that may be trading below their intrinsic value.
| Company | Current Price | Current Price Discount 10 years |
|---|---|---|
| Calumet Specialty Products Partners, L.P. (CLMT) |
$39.48 | none |
| Enbridge (ENB) |
$51.28 | none |
| Norsk Hydro ASA (NHYDY) |
$9.58 | none |
| Linn Energy, LLC (LINE) |
$42.36 | none |
| TETRA Technologies (TTI) |
$8.51 | none |
| Global Partners LP (GLP) |
$50.18 | none |
| Occidental Petroleum Corporation (OXY) |
$55.91 | none |
| Plains GP Holdings, L.P. (PAGP) |
$24.74 | none |
| Kinder Morgan (KMI) |
$30.85 | none |
(GEOI) |
$0.00 | none |
| CrossAmerica Partners LP (CAPL) |
$21.41 | none |
(GGS) |
$0.00 | 100% |
| Apache Corporation (APA) |
$37.63 | 93.3% |
| Targa Resources Corp. (TRGP) |
$268.23 | none |
| Chevron Corporation (CVX) |
$186.56 | none |
(ARP) |
$33.46 | none |
| Adams Resources & Energy (AE) |
$0.00 | 34.9% |
(EOX) |
$1.37 | none |
| Transocean Ltd. (RIG) |
$5.26 | none |
| Valvoline (VVV) |
$35.34 | none |
(CXPO) |
$0.00 | 70% |
| The Williams Companies (WMB) |
$70.40 | none |
(XOM ) |
$153.04 | none |
| EQT Corporation (EQT) |
$51.69 | none |
| Enterprise Products Partners L.P. (EPD) |
$37.75 | none |
(BBEP) |
$0.00 | none |
(WRES) |
$0.00 | none |
| Valero Energy Corporation (VLO) |
$298.31 | none |
| MPLX LP (MPLX) |
$58.85 | none |
| PBF Energy Inc (PBF) |
$61.71 | none |
| McMoRan Exploration Co. (MMR) |
$0.00 | none |
| Marathon Petroleum Corporation (MPC) |
$298.20 | none |
| Azure Midstream Partners, LP (AZUR) |
$0.00 | none |
| CVR Energy (CVI) |
$31.15 | none |
| Enservco Corporation (ENSV) |
$0.00 | none |
| Sunoco LP (SUN) |
$70.57 | none |
| Ring Energy (REI) |
$1.30 | none |
| CKX Lands (CKX) |
$10.57 | none |
| Devon Energy Corporation (DVN) |
$42.98 | 31.9% |
| Petroleo Brasileiro S.A. - Petrobras (PBR) |
$17.96 | 49.6% |
| Diamondback Energy (FANG) |
$188.04 | none |
| TOTAL S.A. (TOT) |
$24.41 | none |
| BP p.l.c. (BP) |
$41.63 | none |
| Oil States International (OIS) |
$8.14 | 72.9% |
| Baytex Energy Corp. (BTE) |
$4.18 | 25.4% |
| Amplify Energy Corp. (AMPY) |
$3.91 | none |
| Delek Logistics Partners, LP (DKL) |
$60.31 | none |
| Viper Energy Partners LP (VNOM) |
$44.61 | none |
| TechnipFMC plc (FTI) |
$71.73 | none |
| Pembina Pipeline Corporation (PBA) |
$48.93 | none |
| Schlumberger Limited (SLB) |
$48.96 | 6.3% |
| National Oilwell Varco (NOV) |
$19.06 | 47.8% |
| Murphy Oil Corporation (MUR) |
$38.69 | 27.7% |
| Nabors Industries Ltd. (NBR) |
$79.26 | 91.1% |
| Noble Corporation plc (NE) |
$41.01 | 23.1% |
| EOG Resources (EOG) |
$145.94 | none |
| CNX Resources Corporation (CNX) |
$34.70 | none |
| Helmerich & Payne (HP) |
$33.46 | none |
| ConocoPhillips (COP) |
$118.06 | none |
| Marathon Oil Corporation (MRO) |
$0.00 | none |
How to Invest in Energy Stocks
Sector-Specific Considerations
When evaluating Energy companies, consider these key factors:
- Sector fundamentals: Is this sector growing, mature, or declining? Growth prospects affect reasonable earnings forecasts.
- Economic sensitivity: How does this sector perform in different economic conditions? Understanding cyclicality helps you time purchases.
- Competitive dynamics: Are barriers to entry high or low? Strong moats protect profits and justify premium valuations.
- Regulatory environment: Does government policy significantly impact this sector? Regulatory changes can create risks or opportunities.
- Capital intensity: Does the business require heavy capital investment? Capital-light businesses often generate better returns.
✓ Sector Analysis Checklist
- Compare P/E ratios within the sector
- Look for strong free cash flow generation
- Assess debt levels relative to peers
- Evaluate dividend sustainability
- Check management track record
- Calculate margin of safety
Common Sector Pitfalls
- Chasing last year's hot sector
- Ignoring sector-wide headwinds
- Overpaying for market leaders
- Neglecting competitive threats
- Failing to diversify across sectors
- Not understanding the business model