Three Oil and Gas Stocks to Watch Closely
Featured Tickers:APA,MPC,MPLX,TTE,VLO
This week, we use AAII’s A+ Investor Stock Grades to provide insight into three oil and gas stocks. With exponential demand for digital modernization and renewable integration in the energy sector, should you consider the three stocks of APA Corp. (APA), Marathon Petroleum Corp. (MPC) and Valero Energy Corp. (VLO)?
Oil and Gas Stocks Recent News
Global oil demand is on track to fall this year for the first time since the pandemic, even as U.S. drivers keep filling up their gas tanks. According to U.S. News and World Report, a new International Energy Agency (IEA) report expects a decline of roughly one million barrels of oil per day in 2026, driven by higher prices and supply disruptions that have hit different regions unevenly. Global demand averaged just under 98 million barrels of oil per day in May 2026, down more than five million barrels from May 2025. Asia has absorbed much of the pullback, with China’s usage falling 9%.
The U.S. News and World Report article points out that the U.S. is the major exception to this global slowdown. Despite average gasoline prices climbing more than 50% since prices began rising and, on average, topping $4.50 per gallon in May, gasoline consumption among American motorists increased in the second quarter of 2026. Part of the explanation may be structural: Gasoline spending has made up a shrinking share of household income in the U.S. over time, cushioning the impact of higher prices; plus, a continuation of the shift back to in-office work has kept commuting-related demand elevated. Given this divergence between falling global demand and resilient U.S. consumption, should you consider oil and gas stocks like APA Corp., Marathon Petroleum and Valero Energy?
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Grading Oil and Gas Stocks With AAII’s A+ Stock Grades
When analyzing a company, it is helpful to have an objective framework that allows you to compare companies in the same way. This is why AAII created the A+ Stock Grades, which evaluate companies across five factors that research and real-world investment results indicate to identify market-beating stocks in the long run: value, growth, momentum, earnings estimate revisions (and surprises) and quality.
Using AAII’s A+ Stock Grades, the following table summarizes the attractiveness of three oil and gas stocks—APA Corp., Marathon Petroleum and Valero Energy—based on their fundamentals.
AAII’s A+ Stock Grade Summary for Three Oil and Gas Stocks
What the A+ Stock Grades Reveal
APA Corp. (APA) is a global oil and gas exploration and production company operating in the U.S., Egypt, the U.K. and beyond. It offers crude oil, natural gas and natural gas liquids exploration, development and production services across its diversified portfolio of assets. The company operates through its primary subsidiaries, including Apache Corp. in the U.S. and Egypt, and its North Sea operations in the U.K. APA Corp. produces a broad range of hydrocarbon products across its onshore and offshore assets, including operations in the Permian Basin, the Western Desert of Egypt and the North Sea. It also holds an interest in Suriname through an exploration joint venture with TotalEnergies SE (TTE), representing a significant long-term growth opportunity in an emerging deepwater basin. The company was founded in 1954 and is headquartered in Houston, Texas.
The company has a Value Grade of A, based on its Value Score of 92, which is deep value. The Value Grade is the percentile rank of the average of the percentile ranks of the price-to-sales (P/S) ratio, price-earnings (P/E) ratio, price-to-book-value (P/B) ratio, price-to-free-cash-flow (P/FCF) ratio, shareholder yield and the ratio of enterprise value to earnings before interest, taxes, depreciation and amortization (EBITDA).
A lower rank on valuation metrics is more attractive. Among all U.S.-listed stocks, APA Corp. ranks in the 13th percentile for its shareholder yield and in the 11th percentile for its price-earnings ratio. The company has a shareholder yield of 5.5% and a price-earnings ratio of 8.3.
APA Corp. has a Momentum Grade of A, based on its Momentum Score of 82. This means that the stock’s momentum has been very strong in terms of its weighted relative price strength over the last four quarters. The weighted four-quarter relative strength rank is the relative price change for each of the past four quarters, with the most recent quarterly price change given a weight of 40% and each of the three previous quarters given a weight of 20%. The ranks are 41, 94, 71 and 79, sequentially from the most recent quarter. The weighted four-quarter relative price strength is 9.3%.
The A+ Quality Grade is the percentile rank of the average of the percentile ranks of return on assets (ROA), return on invested capital (ROIC), gross profit to assets, buyback yield, change in total liabilities to assets, accruals to assets, Z double prime bankruptcy risk (Z) score and F-Score. The score is variable, meaning it can consider all eight measures or, should any of the eight measures not be valid, the valid remaining measures. To be assigned a Quality Score, though, stocks must have a valid (non-null) measure and corresponding ranking for at least four of the eight quality measures.
APA Corp. has a Quality Grade of A, based on a score of 98, which is very strong. The company ranks strongly in terms of its return on assets and F-Score. Its return on assets is 8.4%, which ranks in the 83rd percentile. Its F-Score is 8, which ranks in the 93rd percentile. The F-Score is a number between 0 and 9 that assesses the strength of a company’s financial position based on its profitability, leverage, liquidity and operating efficiency. APA Corp.’s buyback yield of 2.7% ranks in the 84th percentile.
Marathon Petroleum Corp. (MPC) is a leading petroleum refining, marketing and transportation company operating primarily in the U.S. It offers refined petroleum products, midstream services and retail fuel solutions for wholesale, commercial and consumer markets. The company operates through two segments: refining & marketing and midstream. Marathon Petroleum refines a broad range of petroleum products, including gasoline, distillates, asphalt, propane and heavy fuel oil, operating one of the largest refining systems in the U.S. It also operates midstream assets through its majority interest in MPLX LP (MPLX), providing crude oil and natural gas gathering, processing, fractionation and transportation services across its pipeline and storage network. The company was founded in 2011 and is headquartered in Findlay, Ohio.
Marathon Petroleum has a Momentum Grade of A, based on its Momentum Score of 90. This means that the stock’s momentum is very strong in terms of its weighted relative price strength over the last four quarters. The ranks are 93, 86, 38 and 59, sequentially from the most recent quarter. The weighted four-quarter relative price strength is 17.4%.
Earnings estimate revisions indicate how analysts view a firm’s short-term prospects. Marathon Petroleum has an Earnings Estimate Revisions Grade of A, based on a score of 93, which is very positive. The grade is based on the statistical significance of its latest two quarterly earnings surprises and the percentage change in its consensus estimate for the current fiscal year over the past month and past three months.
Marathon Petroleum reported a positive earnings surprise of 120.6% for the first quarter of 2026 and a positive surprise of 50.1% in the previous quarter. Over the last month, the consensus earnings estimate for the second quarter of 2026 has improved from $11.820 to $13.691 per share. The consensus earnings estimate for full-year 2026 has improved from $29.774 to $36.523 per share over the same period.
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Valero Energy Corp. (VLO) is a leading international petroleum refining and ethanol production company operating in the U.S., Canada, the U.K. and beyond. It offers refined petroleum products, renewable fuels and ethanol for wholesale, commercial and retail markets. The company operates through three segments: refining, renewable diesel and ethanol. Valero Energy produces a broad range of refined products, including gasoline, distillates, jet fuel, asphalt, lubricants and petrochemicals, operating one of the largest independent refining systems in the world. It also produces renewable diesel and ethanol through its Diamond Green Diesel joint venture and network of ethanol plants, positioning itself at the forefront of the low-carbon fuels transition. The company was founded in 1980 and is headquartered in San Antonio, Texas.
Valero Energy has a Momentum Grade of A, based on its Momentum Score of 91. This means that the stock’s momentum is very strong in terms of its weighted relative price strength over the last four quarters. The ranks are 91, 86, 77 and 64, sequentially from the most recent quarter. The weighted four-quarter relative price strength is 18.4%.
The company has an Earnings Estimate Revisions Grade of A, based on a score of 90, which is very positive. The company reported a positive earnings surprise of 33.5% for the first quarter of 2026. Over the last month, the consensus earnings estimate for the second quarter of 2026 has increased from $10.060 to $10.111 per share. The consensus earnings estimate for full-year 2026 has improved from $29.656 to $33.461 per share over the same period.
Valero Energy has a Quality Grade of A, based on a score of 87, which is very strong. The company ranks strongly in terms of its buyback yield and F-Score, which rank in the 91st and 83rd percentiles, respectively. Its buyback yield is 5.1%, and its F-Score is 7 out of 9. Its return on assets is 6.9%, ranking in the 79th percentile.