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3 Top-Ranked Value Stocks to Buy From the Energy Space
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Despite the remarkable performance of the Oil/Energy market so far this year — up 16.6% compared with the S&P 500’s 8.2% increase — not all stocks have become overpriced. There are still plenty of opportunities available. Investors who focus on value aim to identify stocks that are currently undervalued, anticipating that others will eventually recognize their true worth, potentially leading to significant returns. After all, everyone appreciates a good bargain.
For those investors seeking stocks with reasonable valuations, SM Energy Company (SM - Free Report) , Global Partners LP (GLP - Free Report) and Murphy USA (MUSA - Free Report) stand out as compelling options.
In addition to their attractive valuation levels, these companies sport a Zacks Rank #1 (Strong Buy) each and demonstrate robust growth prospects, inspiring optimism among analysts.
SM Energy Company: Denver, CO-based SM Energy Company, previously known as St. Mary Land & Exploration Company, is an independent oil and gas explorer in North America. The company’s operations are focused on the Permian Basin region and the South Texas & Gulf Coast region.
Notably, SM Energy's stock has a Value Score of B with its P/E discount being very tempting at the moment. Trading at $51.70, SM Energy’s stock has an 8.76X forward earnings multiple compared to its Zacks Oil and Gas - Exploration and Production - United States industry average of 12.32X.
Furthermore, SM Energy’s annual earnings are expected to rise 1.7% in 2024 and are forecast to jump another 7.6% in 2025 to $6.44 per share. SM Energy’s stock also trades at 2.42X forward sales, which is well below the industry average of 3.24X, with the company’s top line projected to expand 5.5% this year and slated to rise another 2.2% in 2025 to $2.6 billion.
Global Partners LP: It is a vertically integrated energy partnership focused on the distribution of gasoline, distillates, residual oil and renewable fuels, apart from owning several refined-petroleum-product terminals. Unlike most energy operators, which maintained their payout through the coronavirus-induced downturn, Global Partners continued to increase distributions.
GLP is trading at a very reasonable 11.59X forward earnings multiple. This is still an advantageous discount to the Zacks Oil and Gas - Refining & Marketing MLP industry average of 13.38X and the S&P 500’s 21.82X. Global Partners has a Value Score of A.
Global Partners is forecast to see decent growth in its current year and next, with the respective Zacks Consensus Estimate of $3.90 and $4.47 suggesting a 3.7% and 14.6% improvement in year-over-year earnings. Finally, GLP’s stock also trades at a mere 0.06X forward sales, which is well below the industry average of 0.89X
Murphy USA: It is a leading independent retailer of motor fuel and convenience merchandise in the United States. The proximity of Murphy USA’s fuel stations to Walmart supercenters helps the company leverage the strong and consistent traffic that these stores attract. MUSA’s acquisition of QuickChek Corporation — a family-owned food and beverage chain — is expected to help improve its offerings.
With a Value Score of B, Murphy USA stock trades at $412.93, 15.67X forward earnings, which is nicely beneath the S&P 500’s 21.99X despite being above its Zacks Oil and Gas - Refining & Marketing industry average of 9.58X.
Plus, Murphy USA’s EPS is forecasted to climb 3.4% this year and is expected to grow another 16.5% in 2025 to $28.07 per share. Murphy USA stock also trades at 0.4X sales with its top line expected to expand 2.2% in 2024 and 3.2% in 2025.
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3 Top-Ranked Value Stocks to Buy From the Energy Space
Despite the remarkable performance of the Oil/Energy market so far this year — up 16.6% compared with the S&P 500’s 8.2% increase — not all stocks have become overpriced. There are still plenty of opportunities available. Investors who focus on value aim to identify stocks that are currently undervalued, anticipating that others will eventually recognize their true worth, potentially leading to significant returns. After all, everyone appreciates a good bargain.
For those investors seeking stocks with reasonable valuations, SM Energy Company (SM - Free Report) , Global Partners LP (GLP - Free Report) and Murphy USA (MUSA - Free Report) stand out as compelling options.
In addition to their attractive valuation levels, these companies sport a Zacks Rank #1 (Strong Buy) each and demonstrate robust growth prospects, inspiring optimism among analysts.
You can see the complete list of today’s Zacks #1 Rank stocks here.
Let’s take a closer look at each.
SM Energy Company: Denver, CO-based SM Energy Company, previously known as St. Mary Land & Exploration Company, is an independent oil and gas explorer in North America. The company’s operations are focused on the Permian Basin region and the South Texas & Gulf Coast region.
Notably, SM Energy's stock has a Value Score of B with its P/E discount being very tempting at the moment. Trading at $51.70, SM Energy’s stock has an 8.76X forward earnings multiple compared to its Zacks Oil and Gas - Exploration and Production - United States industry average of 12.32X.
Furthermore, SM Energy’s annual earnings are expected to rise 1.7% in 2024 and are forecast to jump another 7.6% in 2025 to $6.44 per share. SM Energy’s stock also trades at 2.42X forward sales, which is well below the industry average of 3.24X, with the company’s top line projected to expand 5.5% this year and slated to rise another 2.2% in 2025 to $2.6 billion.
Global Partners LP: It is a vertically integrated energy partnership focused on the distribution of gasoline, distillates, residual oil and renewable fuels, apart from owning several refined-petroleum-product terminals. Unlike most energy operators, which maintained their payout through the coronavirus-induced downturn, Global Partners continued to increase distributions.
GLP is trading at a very reasonable 11.59X forward earnings multiple. This is still an advantageous discount to the Zacks Oil and Gas - Refining & Marketing MLP industry average of 13.38X and the S&P 500’s 21.82X. Global Partners has a Value Score of A.
Global Partners is forecast to see decent growth in its current year and next, with the respective Zacks Consensus Estimate of $3.90 and $4.47 suggesting a 3.7% and 14.6% improvement in year-over-year earnings. Finally, GLP’s stock also trades at a mere 0.06X forward sales, which is well below the industry average of 0.89X
Murphy USA: It is a leading independent retailer of motor fuel and convenience merchandise in the United States. The proximity of Murphy USA’s fuel stations to Walmart supercenters helps the company leverage the strong and consistent traffic that these stores attract. MUSA’s acquisition of QuickChek Corporation — a family-owned food and beverage chain — is expected to help improve its offerings.
With a Value Score of B, Murphy USA stock trades at $412.93, 15.67X forward earnings, which is nicely beneath the S&P 500’s 21.99X despite being above its Zacks Oil and Gas - Refining & Marketing industry average of 9.58X.
Plus, Murphy USA’s EPS is forecasted to climb 3.4% this year and is expected to grow another 16.5% in 2025 to $28.07 per share. Murphy USA stock also trades at 0.4X sales with its top line expected to expand 2.2% in 2024 and 3.2% in 2025.