On Apr 9, 2013, shares of Noble Energy Inc. (NBL - Analyst Report) hit a 52-week high of $117.70. Noble Energy registered positive earnings surprises in eight of the last ten quarters, with an average beat of 15.56%.
In 4Q12, the company reported strong results, with earnings of $1.65 per share increasing 6.4% from the 4Q11 level. Total revenue of $1.16 billion surpassed the year-ago figure of $0.9 billion by 30.1%. The year-over-year rise in revenue was attributable to a superior performance from the crude oil and condensate segment.
The company continues to make strategic investment to strengthen its position in the global market. After beginning operation in Aseng, offshore Equatorial Guinea in 2011 and Galapagos, in the deepwater Gulf of Mexico in 2012, the company successfully started operation in Tamar natural gas field offshore Israel in Apr 2013. The company is scheduled to begin operation in Alen, offshore Equatorial Guinea in the third quarter of 2013.
In addition, new exploration opportunities in Nevada, the Falklands and Sierra Leone and $1 billion generated from divestiture of non-core assets will enable the company to concentrate more on its core operations.
All these activities will strengthen Noble Energy’s competitive position and boost its financials. Noble Energy projects 2013 sales volume in the range 270 thousand barrels oil equivalent per day (MBoe/d) to 282 MBoe/d, up from 239 MBoe/d sold in 2012.
We expect long-term earnings growth of 8.9% on the back of a 4.15% top-line increase. The Zacks Consensus Estimate for 2013 is $6.39 reflecting year-over-year growth of 29.02%.
The present valuation also makes the company attractive. Shares of American Water Works Company currently trade at 18.33x 12-month forward earnings, a 9.9% discount to the peer group average of 20.34x. In addition, ROE of the company is 11.7%, higher than the peer group average of 7%.
The company has consistently paid dividends to its shareholders and repurchased shares to enhance shareholder value. Noble Energy disbursed $168 million as dividend and repurchased shares worth $13 million in 2012. The quarterly dividend rate was raised to 25 cents from 22 cents in Oct 2012
Noble Energy currently carries a Zacks Rank #3 (Buy). Other independent oil and gas companies like EPL Oil & Gas Inc. , Range Resources Corporation (RRC - Analyst Report) and Stone Energy Corp.(SGY - Analyst Report) look better positioned with a Zacks Rank #1( Strong Buy).
Based in Houston, Texas, Noble Energy was founded in 1932. It operates internationally and engages in the acquisition, exploration, development, production, and marketing of crude oil, natural gas and natural gas liquids.