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4 Reasons to Add Northern Oil and Gas to Your Portfolio

Zacks Equity Research
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Earnings estimates for Northern Oil and Gas, Inc. NOG have been revised upward over the past 30 days, reflecting analyst’s confidence in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings has moved 19.5% and 24.4% north to 49 cents and 56 cents per share, respectively.

Also, the Zacks Consensus Estimate for current-year earnings per share reflects a significant year-over-year surge of 250%. For 2019, the consensus estimate for EPS is depicting a 12.6% year-over-year rise.

Wayzata, MN-based Northern Oil and Gas is an independent energy company involved in the acquisition, exploration, development and production of oil and natural gas properties.

Let’s focus on the factors that make Northern Oil and Gas an attractive stock to hold on to for greater returns.

Price Appreciation: Shares of Northern Oil and Gas have skyrocketed 236% in a year’s time, outperforming the industry’s rally of 22.7%. The stock carries a Zacks Rank #2 (Buy).



VGM Score: The stock has a favorable VGM Score of B. Here V stands for Value, G for Growth and M for Momentum with the score being a weighted combination of all three factors. Back tested results show that stocks with an impressive VGM Score of A or B coupled with a bullish Zacks Rank offer the best investment bets.

Earnings Results & Surprise History: The company delivered earnings of 9 cents per share in second-quarter 2018, beating the Zacks Consensus Estimate of 8 cents by 12.5%. The company has an encouraging earnings surprise history. Its bottom line surpassed the Zacks Consensus Estimate in each of the last four quarters, the average positive surprise being 138.5%. The consecutive estimate beats reflect the company’s operational excellence.

Capital Spending and Production Outlook: The company is focusing on strengthening and growing its drilling plus completion activity. It has revised its drilling and completion capital expenditure budget to $200-$216 million, a $28.5 million rise over the prior guided range for 2018. For the full year, the company is expecting a total capital outlay of $215-$230 million for acquisitions, workovers and other capital expenditure, up $30 million over the past guidance.

The company expects to deliver total production between 23,670 and 24,300 boe/d for 2018, representing 60-64% growth from the production level in 2017. This ramped up output is estimated to be generated from an escalated activity as Northern Oil and Gas is projected to add approximately 25-27 net wells to the whole production tally for the current year.

Other Stocks to Consider

Some other top-ranked stocks from the Zack Oil & Gas Industry are Denbury Resources Inc. DNR, Southwestern Energy Company SWN and Viper Energy Partners LP VNOM, each holding a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Denbury Resources pulled off an average positive surprise of 162.86% in all the trailing four quarters. The Zacks Consensus Estimate for 2018 EPS moved 17.5% up over the past 30 days to 47 cents per share.

Southwestern Energy delivered an average four-quarter beat of 6.48%. The consensus mark for 2018 EPS has been revised 8.6% upward over the past 30 days to 88 cents per share.

Viper Energy Partners came up with an average four-quarter beat of 6.7%. The Zacks Consensus Estimate for 2018 EPS has been raised 85.4% over the past 30 days to $2.67 per share.

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