We are upbeat about Antero Resources Corporation’s AR prospects and believe that it is a promising pick at the moment.
The company currently carries a Zacks Rank #2 (Buy) and a VGM Score of A. Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 (Strong Buy) or 2 offer the best opportunities for investors.
Let’s delve deeper to analyze the factors that make this upstream energy player an attractive investment option.
Antero has strong presence in natural gas-rich shale plays like Marcellus and Utica. In the Utica shale, the company has more than 137,000 net acres and over 484,000 net acres in the Marcellus. Notably, the company estimated a total of 3,295 premium drilling locations in those core operating resources, reflecting strong production potentials.
Importantly, since more than 70% of Antero’s production comprises natural gas, the company is well positioned to capitalize on mounting clean energy demand.
Per the company’s conference presentation, Antero’s drilling and completion activities in both the Marcellus and Utica shale plays are getting efficient over time as reflected by declining drilling days and increasing average lateral length per well.
Moreover, there has been significant reduction of historical well costs in both the shale resources, backing the company’s profits. In fact, we are expecting the stock to see earnings growth of 233.3% and 72.4% through 2018 and 2019, respectively.
This upstream energy firm also has a less levered balance sheet as its total debt to capitalization ratio stands at 38.8%, significantly lower than the industry’s 45.4%.
Antero Resources Corporation Price and Consensus
Antero Resources Corporation Price and Consensus | Antero Resources Corporation Quote
Other Stocks to Consider
Other prospective players in the energy space are Hess Corporation HES, Enterprise Products Partners L.P. EPD and Energen Corporation EGN. While Hess carries a Zacks Rank #2, both Enterprise Products and Energen sport a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Hess beat the Zacks Consensus Estimate in three of the last four quarters, the average positive earnings surprise being 230.5%.
Enterprise Products surpassed the Zacks Consensus Estimate in the prior four quarters, the average positive earnings surprise being 9.3%.
Energen has average positive earnings surprise of 18.6% for the prior four quarters.
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Energen Corporation (EGN) : Free Stock Analysis Report
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