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Here's Why Matador (MTDR) is an Attractive Investment Bet

·3 min read

Matador Resources Company MTDR has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 60 days. The stock, sporting a Zacks Rank #1 (Strong Buy), is likely to see earnings growth of 158.1% this year.

What’s Favoring the Stock?

The price of West Texas Intermediate crude, trading at near $100 per barrel, has risen drastically over the past year. Favorable oil prices are a boon for Matador’s upstream operations. This is because MTDR has a strong presence in oil-rich core acres of the Wolfcamp and Bone Spring plays in the Delaware Basin.

High crude price is likely to aid it in increasing production volumes. For 2022, the upstream energy player expects total production at 37,300 thousand barrels of oil equivalent (MBoE), higher than 31,454 MBoE in 2021. In fact, since 2019, total production has been increasing consistently, contributing to the top and bottom lines.

On another positive note, Matador is planning to turn to sales this year a net of 69.7 wells – including operated and non-operated wells. Its prime priorities for this year include lowering debt, delivering free cashflows and maintaining or increasing dividends.

Banking on these developments, Matador is likely to continue generating handsome free cash flow in the coming quarters. In the first quarter of this year, the company generated free cashflows above its expectations.

Other Stocks to Consider

Some other top-ranked players in the energy space are Antero Resources AR, BP plc BP and Continental Resources, Inc. CLR. While Antero and BP sport a Zacks Rank #1, Continental Resources carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Antero Resources is a leading upstream energy player with a strong presence in the gas-rich prolific Appalachian Basin in West Virginia and Ohio. In the past 60 days, it has witnessed upward earnings estimate revisions for 2022 and 2023.

The substantial exposure to improving commodity price is a huge positive for Antero Resources.

High oil prices are aiding BP’s upstream operations. The sizable refining and marketing operations of BP will protect it if the crude pricing scenario turns unfavorable again.  In 2022, it is likely to witness earnings growth of almost 77%. Over the past few quarters, BP has successfully been reducing long-term debt.

Continental Resources is also a leading upstream energy company with proven reserves in North Dakota and Oklahoma. The oil inventories of the company are among the best in the industry.

Headquartered in Oklahoma City, Continental Resources has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. It has gained 68.9% in the past year, outpacing the 16.2% rise of the composite stocks belonging to the sector.


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BP p.l.c. (BP) : Free Stock Analysis Report
 
Continental Resources, Inc. (CLR) : Free Stock Analysis Report
 
Matador Resources Company (MTDR) : Free Stock Analysis Report
 
Antero Resources Corporation (AR) : Free Stock Analysis Report
 
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