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Here's Why You Should Add Murphy Oil (MUR) to Your Portfolio

Zacks Equity Research
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Earnings estimates for Murphy Oil Corporation MUR have been revised upward in the past 60 days, reflecting analyst’s optimism in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up by 3% and 31.5% to $1.70 per share and $2.34, respectively.

The company’s shares have increased 13.1% in the past six months compared with the industry’s rise of 5.8%.

 

Let’s focus on the factors that make Murphy Oil a profitable pick for greater returns.

Earnings & Surprise History

In second-quarter 2018, Murphy Oil delivered earnings of 36 cents per share, surpassing the Zacks Consensus Estimate of 35 cents by 2.9%. The company’s average four-quarter positive earnings surprise is 96.50%. The stock carries a Zacks Rank #2 (Buy).

VGM Score

The stock has an impressive VGM Score of A. 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 a favorable VGM Score of A or B coupled with a bullish Zacks Rank are the best investment options.

Cost-Saving Initiatives

Murphy Oil has undertaken cost-saving initiatives which have already made a positive impact and are likely to yield. The company’s finding and development cost in 2017 was $13.09 per barrels of oil equivalent (boe), down from the last three year’s cumulative finding and development costs of $14.08 per boe. The company improved three-year finding and development cost by 40% since 2013.

Strong Upstream Portfolio

Murphy Oil possesses one of the best upstream portfolios among the domestic oil and natural gas integrated companies as well as independent E&P group. The company is pursuing steady E&P and development activities in the United States and other international locations. The company expects to spend $1,179 million in 2018 to strengthen its upstream operations.

Other Stocks to Consider

A few other top-ranked stocks from the same space are Bonanza Creek Energy, Inc BCEI, Northern Oil and Gas, Inc NOG and WPX Energy, Inc WPX. Bonanza Creek Energy sports a Zacks Rank #1 (Strong Buy). Northern Oil and Gas and WPX Energy carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bonanza Creek Energy delivered an average positive earnings surprise of 74.88% in the last four quarters. Its 2018 estimates have increased 4.7% to $5.57 in the last 60 days.

Northern Oil and Gas delivered an average positive earnings surprise of 138.54% in the last four quarters. Its 2018 estimates have surged 29.7% to 48 cents in the last 60 days.

WPX Energy delivered an average positive earnings surprise of 24.52% in the last four quarters. Its 2018 estimates have surged 950% to 21 cents in the last 60 days.

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