NEW YORK (TheStreet) -- With BP (BP) - Get Report posting a $6.3 billion loss in the second quarter, we decided to check TheStreet Quant Ratings to see if there are any stocks in the integrated oil and gas sub-sector in which BP operates that would be good investments.

BP's second quarterly hit is largely due to a huge settlement payment from the Gulf of Mexico oil spill, and low oil prices. The company paid nearly $19 billion in the settlement that was announced earlier this month.

TheStreet Quant Ratings rates BP as a "hold," with a "C" letter grade. With low oil prices, and BP's grim quarter, are there any stocks in the "integrated oil and gas" sub-industry worth buying?

There are, and here are the top four, according to TheStreet Ratings,TheStreet's proprietary ratings tool.

TheStreet Ratings projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a buy yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a buy yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Check out which companies made the list. And when you're done, be sure to read about which managed health care stocks to buy now. Year-to-date returns are based on July 28, 2015, closing prices. The highest-rated stock appears last.

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YPF

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4. YPF Sociedad Anonima

(YPF) - Get Report


Rating: Buy, B-
Market Cap: $8.9 billion
Year-to-date return: -14.2%

YPF Sociedad Anonima, an energy company, operates in the upstream and downstream activities in Argentina. It engages in the exploration, development, and production of crude oil, natural gas, and liquefied petroleum gas (LPG).

"We rate YACIMIENTOS PETE FISCALES SA (YPF) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, good cash flow from operations, expanding profit margins and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 38.8%. Since the same quarter one year prior, revenues slightly increased by 1.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has significantly increased by 60.02% to $1,353.93 million when compared to the same quarter last year. In addition, YACIMIENTOS PETE FISCALES SA has also vastly surpassed the industry average cash flow growth rate of -53.49%.
  • 40.47% is the gross profit margin for YACIMIENTOS PETE FISCALES SA which we consider to be strong. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 6.12% trails the industry average.
  • The debt-to-equity ratio is somewhat low, currently at 0.73, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.50 is very weak and demonstrates a lack of ability to pay short-term obligations.
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SNP

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3. China Petroleum & Chemical Corporation

(SNP) - Get Report


Rating: Buy, B-
Market Cap: $91 billion
Year-to-date return: -7%

China Petroleum & Chemical Corporation, an energy and chemical company, through its subsidiaries, engages in the oil and gas, and chemical operations and businesses in the People's Republic of China.

"We rate CHINA PETROLEUM & CHEM CORP (SNP) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its reasonable valuation levels and largely solid financial position with reasonable debt levels by most measures. We feel its strengths outweigh the fact that the company has had somewhat weak growth in earnings per share."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The current debt-to-equity ratio, 0.45, is low and is below the industry average, implying that there has been successful management of debt levels. Even though the company has a strong debt-to-equity ratio, the quick ratio of 0.32 is very weak and demonstrates a lack of ability to pay short-term obligations.
  • Despite the weak revenue results, SNP has outperformed against the industry average of 38.8%. Since the same quarter one year prior, revenues fell by 25.2%. Weakness in the company's revenue seems to have hurt the bottom line, decreasing earnings per share.
  • Net operating cash flow has decreased to $1,077.92 million or 46.90% when compared to the same quarter last year. Despite a decrease in cash flow of 46.90%, CHINA PETROLEUM & CHEM CORP is in line with the industry average cash flow growth rate of -53.49%.
  • The share price of CHINA PETROLEUM & CHEM CORP has not done very well: it is down 21.51% and has underperformed the S&P 500, in part reflecting the company's sharply declining earnings per share when compared to the year-earlier quarter. Looking ahead, although the push and pull of the overall market trend could certainly make a critical difference, we do not see any strong reason stemming from the company's fundamentals that would cause a continuation of last year's decline. In fact, the stock is now selling for less than others in its industry in relation to its current earnings.
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RDS.A

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2. Royal Dutch Shell plc

(RDS.A)


Rating: Buy, B-
Market Cap: $172.8 billion
Year-to-date return: -18.1%

Royal Dutch Shell plc operates as an independent oil and gas company worldwide. It operates through Upstream and Downstream segments. The company explores for and extracts crude oil, natural gas, and natural gas liquids.

"We rate ROYAL DUTCH SHELL PLC (RDS.A) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its attractive valuation levels, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company has had lackluster performance in the stock itself."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • RDS.A's debt-to-equity ratio is very low at 0.26 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
  • ROYAL DUTCH SHELL PLC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. The company has suffered a declining pattern of earnings per share over the past two years. However, we anticipate this trend to reverse over the coming year. During the past fiscal year, ROYAL DUTCH SHELL PLC reported lower earnings of $4.70 versus $5.18 in the prior year. This year, the market expects an improvement in earnings ($7.37 versus $4.70).
  • RDS.A, with its decline in revenue, slightly underperformed the industry average of 38.8%. Since the same quarter one year prior, revenues fell by 40.1%. The declining revenue appears to have seeped down to the company's bottom line, decreasing earnings per share.
  • The change in net income from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income has decreased by 1.8% when compared to the same quarter one year ago, dropping from $4,509.00 million to $4,430.00 million.
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PZE

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1. Petrobras Argentina S.A.

(PZE)


Rating: Buy, B
Market Cap: $1.4 billion
Year-to-date return: 39.3%

Petrobras Argentina S.A. operates as an integrated energy company. It operates through four segments: Oil and Gas Exploration and Production, Refining and Distribution, Petrochemicals, and Gas and Energy.

"We rate PETROBRAS ARGENTINA SA (PZE) a BUY. This is driven by a number of strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, increase in net income and increase in stock price during the past year. We feel its strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 38.8%. Since the same quarter one year prior, revenues slightly increased by 2.6%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PZE's debt-to-equity ratio is very low at 0.22 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.38, which illustrates the ability to avoid short-term cash problems.
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Oil, Gas & Consumable Fuels industry average. The net income increased by 6.1% when compared to the same quarter one year prior, going from $87.95 million to $93.28 million.
  • After a year of stock price fluctuations, the net result is that PZE's price has not changed very much. Although its weak earnings growth may have played a role in this flat result, don't lose sight of the fact that the performance of the overall market, as measured by the S&P 500 Index, was essentially similar. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.