Stock of the Day

April 12, 2022

EOG Resources (EOG)

$113.81
+$2.78 (+2.5%)
Market Cap: $61.98B

About EOG Resources

EOG Resources, Inc., together with its subsidiaries, explores for, develops, produces, and markets crude oil, natural gas liquids, and natural gas primarily in producing basins in the United States, the Republic of Trinidad and Tobago and internationally. The company was formerly known as Enron Oil & Gas Company. EOG Resources, Inc. was incorporated in 1985 and is headquartered in Houston, Texas.

EOG Resources Bull Case

Here are some ways that investors could benefit from investing in EOG Resources, Inc.:

  • The current stock price is around $110, which may present a buying opportunity for investors looking for value in the energy sector.
  • EOG Resources, Inc. reported earnings per share of $2.87, exceeding analysts' expectations, indicating strong financial performance and potential for future growth.
  • The company has a solid return on equity of 23.77%, suggesting effective management and profitability relative to shareholder equity.
  • With a market capitalization of approximately $61 billion, EOG Resources, Inc. is a significant player in the energy exploration industry, providing stability and potential for long-term investment.
  • Recent institutional investments, including a 5.2% increase in holdings by Nexus Investment Management ULC, reflect confidence in the company's future prospects.

EOG Resources Bear Case

Investors should be bearish about investing in EOG Resources, Inc. for these reasons:

  • The company's revenue has decreased by 7.4% compared to the same quarter last year, which may indicate challenges in maintaining sales growth.
  • Despite a strong earnings report, the revenue fell short of analysts' estimates, which could raise concerns about future performance and market expectations.
  • With a debt-to-equity ratio of 0.13, while low, it may suggest limited leverage for growth opportunities compared to competitors with higher ratios.
  • Recent downgrades in stock ratings, including a shift from "buy" to "hold," may signal caution among analysts regarding the stock's short-term performance.
  • The stock has experienced volatility, with a 52-week high of $138.18 and a low of $102.52, indicating potential risks for investors concerned about price fluctuations.

3 Hot Energy Stocks With More in the Tank

Written By MarketBeat Staff on 3/15/2022

3 Hot Energy Stocks With More in the Tank

Lately you could throw a dart at a group of energy stocks and probably come out a winner. 

A sector that was hit hard during the early months of the pandemic has turned into the hottest thing in the equity market. After recovering 35% last year, global energy stocks have caught fire again in 2022 due favorable supply and demand dynamics that have been accelerated by the Russia-Ukraine war

With WTI crude prices trading above $100 for the first time since 2014, oil producers and service providers are suddenly wishing there were more than 24 hours in a day to capitalize on the current landscape. Although a surge in China’s coronavirus cases now threatens the demand side of the equation, elevated oil prices are likely to be a boon to oil companies for some time.

Upstream, midstream, and downstream oil and gas businesses are seeing investors stream into their stocks at breakneck paces this month. Is it too late to join the party?

A post-exuberance correction appears inevitable for the energy sector, especially if Russia-Ukraine tensions ease in the days ahead. If this occurs, it could present an opportunity for investors to get in on an oil industry poised to deliver slick results in 2022. Here are three names that still appear to have good upside.

What is a Good Oil Stock to Buy? 

EOG Resources, Inc. (NYSE: EOG) is one of the country’s largest independent oil and gas producers. A leading player in both the Bakken and Eagle Ford shale regions, EOG has additional assets in the U.K. and Trinidad. 

Higher realized crude and natural gas prices along with increased production led to EPS of $8.60 last year, nearly 6x the company’s profits in 2020. In the fourth quarter, EOG’s average oil price was $78.29. It has only gone higher, setting the stage for a tremendous start to the new year. 

The low-cost driller is forecast to grow its bottom line by 47% this year, an estimate that could go up if oil prices continue to trend higher. This means that at 9x forward earnings, EOG remains one of the best values in the E&P space. A $3.00 per share dividend with hike potential isn’t too shabby either. 

Is Williams Companies Stock a Buy?

The Williams Cos., Inc. (NYSE: WMB) is one of the best midstream companies in the business. Its network of over 33,000 miles of oil and gas pipelines transport energy resources to and from the Northwest, Eastern Seaboard, and everywhere in between.

Since its primary focus is natural gas and natural gas liquids (NGLs), Williams Companies is a play on North American gas infrastructure. Natural gas prices have also trended higher during the economic recovery and are receiving a boost from the Russia-Ukraine crisis. Russia supplies almost half of Europe’s natural gas imports so fears that Putin will cut off this supply are keeping gas prices elevated. 

Putting the near-term geopolitics aside, Williams Companies is expected to benefit from growing long-term demand for relatively cheap U.S. natural gas. Wall Street is projecting 15% earnings growth this year and is mostly bullish on the stock. Despite its 22% year-to-date advance, ten of the Street's last 11 opinions have been buys. Still $30 away from its 2015 record high, Williams Companies’ upside could be as lengthy as its pipelines. 

Will Pioneer Natural Resources Stock Go Up?

Back to the E&P group, Pioneer Natural Resources Co. (NYSE: PXD) recently eclipsed its all-time high set in July 2014 but appears to have room to run. This week Wells Fargo became the latest sell-side firm to reiterate its buy rating and gave the stock a $276 target, which implies 20% upside. 

Pioneer is one of the leading players in the Permian Basin where it has extensive exploration and production facilities for oil, gas and NGLs. Higher prices for all of the above commodities drove a 119% surge in revenue in 2021 forming a base analysts predict the company can grow from with prices and production on the rise.

A unique dividend structure is more reason for investors to like Pioneer. On top of a base dividend, the company recently instituted a variable dividend tied to ongoing performance. 

This week shareholders received a $3.00 variable dividend payment to compliment a $0.78 dividend that was increased 26% from the previous dividend. A generous dividend policy, new $4 billion repurchase program, and forward P/E under 10 point to a shareholder friendly energy name with plenty of gas in the tank.

Recent News