We are upbeat about Cabot Oil & Gas Corporation’s COG prospects and believe it is a promising pick at the moment.
The company currently sports a Zacks Rank #1 (Strong Buy) and a VGM Score of B. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 (Buy) offer the best opportunities for investors.
Let’s delve deeper to analyze the factors that make this upstream energy player an attractive investment option.
Access to Marcellus’s Core Gas Acres
Cabot Oil & Gas is among the leading explorers and producers of natural gas with exclusive focus on domestic resources. In the United States, the company primarily operates in gas-rich Marcellus Shale, where more than 80% of capital budget has been allocated.
In the Marcellus Shale, the company has roughly 3,000 of undrilled prospective drilling locations, reflecting strong production prospects. In fact, through 2018, the company estimates production growth of 7% to 8%. Through 2019, Cabot expects production growth to be higher at 20-25%.
Well Placed to Capitalize Clean Energy Demand
Since almost all of Cabot’s production comprises natural gas, the company is well placed to capitalize on the growing clean energy demand.
Investors should know that through 2018, natural gas contributed to roughly 32% of the nation’s electricity generation, more than coal, per U.S. Energy Information Administration.
Other Stocks to Consider
Other prospective players in the energy space are TC PipeLines, LP TCP, Enterprise Products Partners L.P. EPD and Unit Corporation UNT. While TC PipeLines carries a Zacks Rank #2, Enterprise Products and Unit sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
TC PipeLines beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 15.6%.
Enterprise Products will likely post earnings growth of 36.4% and 6.8% through 2018 and 2019, respectively.
Unit Corporation surpassed the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 21.3%.
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