69.50 -0.07 (-0.10%)
After hours: 7:56PM EDT
|Bid||69.31 x 1000|
|Ask||69.70 x 900|
|Day's Range||67.40 - 70.69|
|52 Week Range||64.33 - 114.38|
|Beta (3Y Monthly)||1.71|
|PE Ratio (TTM)||11.31|
|Earnings Date||Nov 6, 2019|
|Forward Dividend & Yield||1.15 (1.70%)|
|1y Target Est||102.74|
Oil prices bottomed out last December and rose steadily through the first four months of this year. Since then, however, the oil markets have slipped and been unable to regain traction. On the international market, Brent crude is down 19.6% from its April 23 peak, while the US benchmark WTI has slipped 20.8%.J.P. Morgan’s Dubravko Lakos-Bujas, chief U.S. equity strategist, sees a possible near-term turnaround in the oil markets, however. He writes, “We believe favorable technicals, improving fundamentals with stabilizing business cycle, and ongoing geopolitical tensions in the Middle East could help redirect flows into this universally hated and cheap sector.” In short, the industry has a solid business foundation, while political instability may act to push prices back up. He adds three additional factors that point toward a bullish future for oil. First, the low prices have pushed oil stocks to discount valuations; second, many oil companies are working to lure investors with increased dividends; and third, the US economy shows signs of picking up in the next three to six months.Based on this bullish thesis, we’ve used TipRanks’ Stock Screener to pick out three energy stocks with Strong Buy consensus ratings. All three have weathered the low prices and are ready take advantage of any upturn in the oil markets.Cabot Oil & Gas Corporation (COG)We’ll start with Cabot, the smallest of today’s stock picks. The company has a market cap of $7.4 billion, and is focused on the Marcellus shale formation of the Appalachian region. Cabot controls 11.6 trillion cubic feet of proven natural gas reserves in northeast Pennsylvania. For a mid-size company, this is a large asset in a strategic location of a high-demand area. Cabot has drilled over 650 wells in the last 10 years.Natural gas is a prime fuel for electrical generation as well as home heating and cooking, so Cabot’s product has no want of customers. The company reported 2018 net income of $100 million on revenues of $1.76 billion. While overhead in the gas drilling and fracking business is high, Cabot has sufficient cash flow to maintain a 9-cent per quarter dividend payment, which annualizes at 36 cents and a 2.05% yield. The company has been raising that dividend steadily over the past two years.Cabot’s solid position in the US natural gas industry earned it an upgrade from 5-star Wolfe Research analyst Josh Silverstein. Silverstein changed his stance from Neutral to Buy, writing, “We’ve been on the sidelines at COG looking for a better entry point… With the stock now -20% over the last three months…, we see an improved risk/reward and opportunity to own one of the best low-cost asset bases…” In upgrading his stance on the stock, Silverstein maintained his $27 price target, indicating confidence in a 53% upside to the shares.Overall, COG’s Strong Buy consensus rating comes from 8 reviews, including 6 "buys" and 2 "holds," given in the past three months. The stock is selling for a low $17.59, but the $23.14 average price target suggests a potential of nearly 30% upside. (See Cabot Oil & Gas stock analysis on TipRanks)Diamondback Energy (FANG)Diamondback is a major producer of crude oil, natural gas, and natural gas liquids, all in the Permian Basin of West Texas. Diamondback has over 992 million barrels of proven reserves available for recovering in this rich oil basin, of which 63% is petroleum and the remainder split between various forms of natural gas products. These reserves justify the company’s $13.7 billion market cap.Investor like a strong bottom line, and FANG delivers that, too. The company reported 2018 income of $944 million, based on total revenues of $2.18 billion. While Diamondback just missed earnings expectations in the last quarter, the company’s 2019 EPS has been steadily growing. FANG shares pay out a modest dividend, annualized at 75 cents per share, or a 0.89% yield.With a background like that, it’s no wonder that FANG has attracted rave reviews from the analysts. Neal Dingmann, of SunTrust Robinson, writes of the stock, “We believe the overall 2019 plan (production/CAPEX) remains on track resulting in one of the best growth/returns/FCF stories in the E&P space in our opinion.” His $145 price target implies an upside of 72% for FANG. (To watch Dingmann's track record, click here)J.P. Morgan’s Michael Glick is also upbeat on FANG, saying, “Following the recent pullback in the stock, we model a ~6% FCF yield after dividends in 2020E and have the stock trading ~4.3x EV/EBITDA. In our view, this is one of the more attractive valuations in the sector.” He gives this stock a price target of $139, suggesting room for a 65% upside.All in all, FANG’s analyst consensus rating is a unanimous Strong Buy, with 12 analysts giving it the thumbs up in the last three months. Shares sell for $83, and the average price target is $139; this indicates a potential upside of 65%. (See Diamondback Energy stock analysis on TipRanks)EOG Resources (EOG)Our final stock today is also our largest. EOG has a market cap of $39.6 billion, and has operations in the same Marcellus shale formation as Cabot above. EOG is more spread out, however, with active wells and exploration in the Rocky Mountains, Texas, British Columbia, the island of Trinidad, and the Sichuan Basin of central China. The bulk of the company’s operations, however, are centered in the Permian Basin of Texas. EOG’s proven reserves are given as 2,928 million barrels of oil equivalent.A widespread energy producer with active operations in all of the United States’ most productive oil regions can be expected to bring in a high income, and investors will not be disappointed by EOG’s performance. The company’s 2018 revenues were reported at $17.275 billion and yielded a net income of $3.42 billion. These numbers were based on an annualized daily output of 719 thousand barrels of oil equivalent. EOG has used its strong cash flow to support an annualized dividend of $1.15 per share. The payout ratio, a measure of the dividend compared to the annual EPS, is a healthy 20%.Evercore analyst Stephen Richardson has taken note of EOG, reiterating his Buy rating on the stock and set a bullish price target of $145. He said, “A combination of early (read low cost) entrance into oil basins with the technical prowess to consistently drill and complete some of the best wells industry wide is a differentiator. EOG is perhaps the only upstream entity in a position to bolster ROCE by deploying, not rationing capital which is unique.” Richardson’s price target implies a hefty 113% upside to this stock.Overall, TipRanks’ data shows an overwhelmingly bullish camp backing this oil company. The ‘Strong Buy’ stock has amassed 10 "buy" ratings in the last three months, with just two analysts playing it safe with a "hold." The 12-month average price target stands tall at $102.18, marking nearly 50% in return potential for the stock. (See EOG stock analysis on TipRanks)
Most investors tend to think that hedge funds and other asset managers are worthless, as they cannot beat even simple index fund portfolios. In fact, most people expect hedge funds to compete with and outperform the bull market that we have witnessed in recent years. However, hedge funds are generally partially hedged and aim at […]
The Eagle Ford Shale in Texas is likely to experience heightened activity in the near-to-medium term with enough capital set to land in this rich oil and gas-producing formation.
A mountain of debt and poor cash flow have forced US shale stocks lower last year, but Goldman Sachs now sees a buying opportunity arising
HOUSTON , Sept. 24, 2019 /PRNewswire/ -- EOG Resources, Inc. (EOG) will host a conference call and webcast to discuss third quarter 2019 results on Thursday, November 7, 2019 , at 9 a.m. Central time ( ...
Oil stocks have been put through the volatility wringer of late.On Sept. 14, drones attacked a key processing facility in Abqaiq as well as an oil field in Khurais, temporarily knocking out about 5.7 million barrels of Saudi daily production. That represents half of Saudi Arabia's output and approximately 5% of global oil supply, so unsurprisingly, the news sent U.S. crude oil prices soaring by almost 15% on Sept. 16 - the largest gain in more than 30 years.But a day later, oil pulled back nearly 6% following Saudi Energy Minister Prince Abdulaziz bin Salman's announcement that the country's oil production will be back at normal levels by the end of September. Crude closed another 2% lower Sept. 18.Was this merely a quick flash in the pan for energy investors? Maybe. But heightened regional tensions still could bode well for oil prices in the coming months. And Citi analysts argue that the attacks highlight a fundamental problem for the kingdom's oil production. "No matter whether it takes Saudi Arabia five days or a lot longer to get oil back into production, there is but one rational takeaway from this weekend's drone attacks on the Kingdom's infrastructure - that infrastructure is highly vulnerable to attack, and the market has been persistently mispricing oil," they write.Here are seven analyst-loved oil stocks to buy in this volatile energy environment. Here, we've used TipRanks' stock screener to find energy stocks that have earned a Strong Buy consensus rating from the analyst community over the past three months. We'll examine each one, including price targets and what the pros are saying about their potential. SEE ALSO: 25 Dividend Stocks That Analysts Love the Most
Equity investors seeking to profit from rising oil prices amid escalating violence in the Middle East should focus on eight energy stocks and suppliers that are uniquely positioned to outperform. Stocks that could see the biggest sustained gains include energy producers Brigham Minerals Inc. (MNRL), Murphy Oil Corp. (MUR), Pioneer Natural Resources Co. (PXD), and EOG Resources Inc. (EOG). Also poised to benefit are energy industry suppliers such as valve and seal maker Flowserve Corp. (FLS), compressor maker Gardner Denver Holdings Inc. (GDI), valve maker Circor International Inc. (CIR), and General Electric Co. (GE), which owns 40% stake in Baker Hughes (BHGE).
STOCKSTOWATCHTODAY BLOG Three numbers to start your day: The UAW Strike Costs (GM) $50 Million —each day, in earnings. The United Automobile Workers voted to strike on Sunday and told its roughly 46,000 members to walk out or not show up to work Monday.
U.S. liquefied natural gas (LNG) producer Cheniere Energy has signed long-term gas supply deals with shale producer EOG Resources, with some of the gas tied to Asian spot LNG prices in the second instance of such a link. Cheniere typically buys natural gas using a price mechanism linked to a U.S. gas benchmark, but in a June deal with Apache Corp, it signed its first supply agreement tied to spot LNG prices.
In light of uncertainties, some analysts are advising investors to hold stocks that will get a bump from higher prices but are still prepared for a world with lower oil prices.
HOUSTON , Sept. 12, 2019 /PRNewswire/ -- The Board of Directors of EOG Resources, Inc. (EOG) has declared a dividend of $0.2875 per share on EOG's Common Stock, payable October 31, 2019 , to stockholders ...