BOSTON ( TheStreet) -- With crude oil approaching $90 a barrel, driven by the economic recovery and the weaker dollar, energy companies are racking up profits. Still, there are bargains in the sector. Here are the 10 cheapest oil and gas stocks in the S&P 500 Index, based on forward earnings. The S&P 500 sells for a forward earnings multiple over 14. These energy stocks are cheaper than that. Below, they are ordered from cheap to cheapest.
10. El Paso (EP) is a natural gas transmission, exploration and production company. Third-quarter profit more than doubled to $142 million, or 19 cents a share, as revenue grew 24%. The operating margin rose from 34% to 44%. El Paso's stock trades at a trailing earnings multiple of 11, a forward earnings multiple of 12, a book value multiple of 2.1 and a cash flow multiple of 5.3, 34%, 22%, 53% and 29% discounts to peer averages. Of analysts following the stock, 10 rate it "buy" and four rank it "hold." A median target of $15.64 suggests 16% upside in 12 months.
Bullish Scenario: BMO Capital Markets expects El Paso's stock to advance 26% to $17.