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On Mar 25, 2013, shares of Questar Corporation (STR - Analyst Report) reached a 52-week high of $24.16 based on a slew of positive developments.

During the first half of January, Questar Fueling, a unit of Questar Corporation, entered into a contract to construct and operate a compressed natural gas (CNG) fueling facility in Houston, Texas.  This facility is expected to serve up to 200 natural gas-powered trucks operated by Swift Transportation (SWFT - Snapshot Report) and Central Freight Lines – both industry leaders in terms of adopting CNG as a viable transportation fuel alternative for the heavy-duty market.

After that, on Feb 20, 2013, Questar reported earnings per share (excluding retirement incentive costs) of 38 cents, which were up by 11.8% from the profit of 34 cents earned in the prior-year quarter. The result also surpassed the Zacks Consensus Estimate by 3 cents. The earnings beat was primarily due to the high rate of drilling success.

In addition, Questar sports an impressive long-term expected earnings growth rate of 4.80%.

Utah-based Questar is a natural gas-focused energy company with three principal subsidiaries – Wexpro Company, Questar Pipeline and Questar Gas Company. In Jun 2010, Questar completed the spin-off of its unregulated E&P business and gas gathering and marketing segment into the independent and publicly traded QEP Resources Inc. (QEP).

Questar, after the QEP Resources spin-off, has transformed itself into a natural gas-operated energy company, which focuses exclusively on exploring natural gas resources while serving customers domestically and worldwide. The company is expected to perform well in the coming quarters, given its focused and experienced managerial team, manageable debt maturities and long-term contracts.

Moreover, Questar enjoys of one of the best credit ratings in the utilities sector. This provides the company with a competitive advantage in accessing capital at a reasonable cost.

Questar currently carries a Zacks Rank #2 (Hold), implying that it is expected to outperform the broader U.S. equity market over the next one to three months.  

Other Stocks to Consider

Two firms in the energy sector that are expected to significantly outperform the equity markets in the next one to three months are Helmerich & Payne Inc (HP - Analyst Report) and Range Resources Corporation (RRC - Analyst Report). Both of these stocks carry a Zacks Rank #1 (Strong Buy).   
 

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