On Mar 12, Zacks Investment Research upgraded Calumet Specialty Products Partners L.P. (CLMT) to a Zacks Rank #1 (Strong Buy).
Why the Upgrade?
Calumet has been witnessing rising earnings estimates owing to better-than-expected fourth-quarter 2012 results on the back of increased gross profit in Fuel Products segment. This was aided by strong sales volume and increased crack spreads. The partnership declared impressive results on Feb 13, 2013, wherein earnings of 65 cents per unit surpassed the Zacks Consensus Estimate of 64 cents by 1.56%.
Indianapolis-based Calumet has outperformed the Zacks Consensus Estimate for three straight quarters by an average of 46.11%. The partnership also boasts an impressive long-term expected earnings growth rate of 25.32%.
Calumet’s total sales grew 19.9% to $1,221 million in the quarter from $1,018 million in the year-ago period and came ahead of the Zacks Consensus Estimate of $713 million.
Calumet also raised its quarterly common stock distribution to 65 cents per unit ($2.60 per unit annualized). This payout hike marks an increase of 4.8% over the third quarter of 2012 and a 22.6% increase over the fourth quarter of 2011.
Based on Calumet’s consistency in earnings, attractive fundamentals and a positive outlook, the Zacks Consensus Estimate for first quarter of 2013 has shot up 329.41% to 73 cents per unit over the last 30 days. For fiscal 2013, the Zacks Consensus Estimate advanced 5.76% over the same timeframe to $3.12 per unit.
Other Stocks to Consider
Other stocks worth considering in the energy sector include EPL Oil & Gas Inc. (EPL), Range Resources Corp. (RRC) and Marathon Petroleum Corporation (MPC). All these firms – sporting a Zacks Rank #1 (Strong Buy) – offer value and are worth accumulating at current levels.
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