Estimates for Murphy Oil Corporation MUR have been revised upward in the past 60 days, which reflects analysts’ optimism in the stock. The Zacks Consensus Estimate for 2019 earnings moved up 65.2% to $3.47.
Shares of Murphy Oil have increased 8.3% in the last twelve months, against the industry’s decline of 15.0%. The stock carries a Zacks Rank #3 (Hold).
Let’s focus on the factors that make Murphy Oil an attractive stock to hold in.
Surprise Trend & Y/Y Growth Estimates
Murphy Oil pulled off an average positive earnings surprise of 76.16% in the last four quarters. The Zacks Consensus Estimates for year-over-year earnings growth for 2018 and 2019 are pegged at 1246.15% and 132.77%, respectively. The Zacks Consensus Estimates for year-over-year sales growth for 2018 and 2019 are pegged at 18.34% and 44.74%, respectively.
Murphy Oil 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 best investment options.
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. In the first nine months of 2018, the company spent $893 million on exploration as well as production and expects to spend $1.18 billion in 2018.
Development in Onshore & Offshore Assets
Murphy Oil focuses on developing high-margin liquid assets. The company expects 58% to be liquids of the total production in 2018. Ongoing development in North American onshore assets, which reflects continuous improvement in cost reductions with less operating expenses and development of offshore assets will further strengthen production of the company.
In addition, offshore assets in the Gulf of Mexico and Malaysia will continue to boost production. In October, Murphy Oil entered into a definitive agreement to develop the Gulf of Mexico assets. The deal is expected to close in the fourth quarter and to add high margin oil to the company’s total production. Murphy oil’s corporate oil-weighted production is also expected to increase by nearly 9 percentage points to 61%, post closure.
Stocks to Consider
A few better-ranked stocks from the same industry are Energen Corporation EGN, Chaparral Energy, Inc CHAP and Cimarex Energy Co XEC. While Energen carries Zacks Rank #1(Strong Buy), Chaparral Energy and Cimarex Energy hold a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Energen reported average positive earnings of 2.21% in the past four quarters. The Zacks Consensus Estimate for 2018 Earnings moved up 4.2% in the past 30 days.
Chaparral Energy reported average positive earnings of 26.45% in the past four quarters. The Zacks Consensus Estimate for 2018 Earnings moved up 13% in the past 30 days.
Cimarex Energy reported average positive earnings of 10.17% in the past four quarters. The Zacks Consensus Estimate for 2018 Earnings moved up 3.4% in the past 30 days.
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