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Here's Why You Should Add Murphy Oil (MUR) to Your Portfolio

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Earnings estimates for Murphy Oil Corporation (MUR - Free Report) have been revised upward in the past 60 days, reflecting analyst’s optimism in the stock. The Zacks Consensus Estimate for 2018 and 2019 earnings moved up by 3% and 31.5% to $1.70 per share and $2.34, respectively.

The company’s shares have increased 13.1% in the past six months compared with the industry’s rise of 5.8%.

 

Let’s focus on the factors that make Murphy Oil a profitable pick for greater returns.

Earnings & Surprise History

In second-quarter 2018, Murphy Oil delivered earnings of 36 cents per share, surpassing the Zacks Consensus Estimate of 35 cents by 2.9%. The company’s average four-quarter positive earnings surprise is 96.50%. The stock carries a Zacks Rank #2 (Buy).

VGM Score

The stock 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 the best investment options.

Cost-Saving Initiatives

Murphy Oil has undertaken cost-saving initiatives which have already made a positive impact and are likely to yield. The company’s finding and development cost in 2017 was $13.09 per barrels of oil equivalent (boe), down from the last three year’s cumulative finding and development costs of $14.08 per boe. The company improved three-year finding and development cost by 40% since 2013.

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. The company expects to spend $1,179 million in 2018 to strengthen its upstream operations.

Other Stocks to Consider

A few other top-ranked stocks from the same space are Bonanza Creek Energy, Inc , Northern Oil and Gas, Inc (NOG - Free Report) and WPX Energy, Inc . Bonanza Creek Energy sports a Zacks Rank #1 (Strong Buy). Northern Oil and Gas and WPX Energy carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Bonanza Creek Energy delivered an average positive earnings surprise of 74.88% in the last four quarters. Its 2018 estimates have increased 4.7% to $5.57 in the last 60 days.

Northern Oil and Gas delivered an average positive earnings surprise of 138.54% in the last four quarters. Its 2018 estimates have surged 29.7% to 48 cents in the last 60 days.

WPX Energy delivered an average positive earnings surprise of 24.52% in the last four quarters. Its 2018 estimates have surged 950% to 21 cents in the last 60 days.

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