If You Invested $1000 in Matador Resources 10 Years Ago, This Is How Much You'd Have Now
How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.
Another thing that can drive investing is the fear of missing out, or FOMO. This particularly applies to tech giants and popular consumer-facing stocks.
What if you'd invested in Matador Resources (MTDR) ten years ago? It may not have been easy to hold on to MTDR for all that time, but if you did, how much would your investment be worth today?
Matador Resources' Business In-Depth
With that in mind, let's take a look at Matador Resources' main business drivers.
Headquartered in Dallas, TX, Matador Resources Company is among the leading oil and gas explorer in the shale and unconventional resources in the United States. The company’s upstream operations are primarily concentrated in the in the Delaware and Midland basins — two sub-basins of Permian — and South Texas’ Eagle Ford shale. The company, founded in 1983, also operates in the Cotton Valley and Haynesville shale resources.
Overall, the company’s prime intention is to create more value for shareholders and to generate lucrative returns from the capital invested in unconventional plays. The company is also committed toward developing and evaluating additional resources that will boost oil and natural gas production, proved reserves and cashflows. In fact, Matador Resources emphasized that it has successfully widened its reserve base and production of commodities despite a challenging business scenario owing to volatile oil and gas prices since 2014.
Total proved oil and gas reserves of Matador Resources grew 20% year over year through 2021 to 323.4 million Boe, marking an all-time high level. Of the total amount, 56.1% was oil. In addition, 96% was from the Delaware Basin. Matador’s production increased 30.2% year over year to 86,176 (Boe/d) through 2021, of which 56.7% was oil.
Through San Mateo Midstream, LLC — joint venture between an affiliate of Matador and Five Point Energy LLC — the company conducts midstream businesses to support upstream operations. Starting from transporting oil, gathering natural gas, crude and salt water, Matador’s midstream operations also comprises of processing natural gas.
There is ample demand for midstream infrastructures like oil and gas transportation as well as gathering assets in the U.S. shale plays like the Permian Basin. Since 2012, the company’s midstream business has come a long way as it currently captures more than $1 billion in value compared to some negligible figures at the beginning.
Bottom Line
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Matador Resources ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in May 2012 would be worth $5,396.55, or a 439.66% gain, as of May 25, 2022, according to our calculations. Investors should note that this return excludes dividends but includes price increases.
In comparison, the S&P 500 gained 198.44% and the price of gold went up 15.01% over the same time frame.
Going forward, analysts are expecting more upside for MTDR.
Matador's upstream operations are mainly concentrated in the Delaware Basin, which is among the country’s most prolific oil and gas plays. Since 2011, the company significantly boosted its Delaware acreage, which now covers 124,800 net acres. Moreover, it identified up to 4,381 gross potential drilling locations on its Delaware Basin acreage, making its production outlook bright. For 2022, it expects oil-equivalent production of 36.3-38.3 million barrels, suggesting an increase from 31.5 million barrels in 2021. The potential rise in production and high commodity prices are expected to improve the company’s profitability. The company recently reported strong first-quarter earnings owing to increased oil-equivalent production volumes and higher commodity price realizations. Thus, Matador is considered a preferred energy company to own now.
The stock has jumped 5.18% over the past four weeks. Additionally, no earnings estimate has gone lower in the past two months, compared to 5 higher, for fiscal 2022; the consensus estimate has moved up as well.
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