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EnLink Midstream (ENLC - Free Report) , a Zacks Rank #1 (Strong Buy) stock, has benefitted immensely from the commodity price surge this year. After falling under $1/share during the initial onset of the coronavirus pandemic, the stock has surged over 1,500% since March 2020 and continues to make a series of higher highs. Only stocks that are garnering extreme buying pressure are able to make this type of price move, going from penny stock to double digits in just a two-year time span. ENLC is currently trading near new highs on the year, even as the market continues to hover in a correction.
ENLC boasts our highest-possible ‘A’ ratings for each of our Zacks Growth and Momentum Style Score categories, indicating a strong likelihood that the stock propels higher on the powerful combination of positive earnings estimate revisions and stock price performance. The company is a component of the Zacks Oil & Gas – Refining & Marketing industry, which ranks in the top 2% of all Zacks Ranked Industries. The group is up more than 43% this year while the S&P is down more than 20%. This industry holds several attractive characteristics as shown below:
Image Source: Zacks Investment Research
Quantitative research studies have repeatedly shown that roughly half of a stock’s future price appreciation is due to its industry grouping. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months. By targeting stocks contained within top industry groups, investors can dramatically improve their rate of success.
Company Description
EnLink Midstream, LLC provides midstream energy services domestically. The company is engaged in the gathering, processing, transporting, storing, and selling of natural gas and crude oil. Its midstream network includes over 12,000 miles of pipelines and more than 20 natural gas processing plants.
ENLC is also involved in carbon capture, in an effort to obtain real progress in terms of the decarbonization of the global economy. Just last month, the company announced that it entered a transportation service agreement with a subsidiary of ExxonMobil, where it will utilize portions of its existing pipeline network as well as new facilities to deliver carbon dioxide from the Mississippi River corridor to ExxonMobil’s carbon dioxide storage location.
Earnings Trends and Future Estimates
ENLC has exceeded earnings estimates in each of the past four quarters, sporting an average 92.58% beat over that timeframe. Last week, the oil and gas company reported third-quarter earnings of $0.18 cents per share, which translated to a 63.64% positive surprise versus the $0.11/share consensus estimate.
Looking ahead, earnings estimates for the current quarter as well as 2023 have been skyrocketing. Analysts are in agreement and in the past 30 days, Q4 EPS estimates have been increased by 25% to $0.15 per share. This reflects a 36.4% growth rate relative to the same quarter last year. It’s obvious the growth is there and looks set to continue.
Image Source: Zacks Investment Research
Charting the Course
ENLC has continued its winning ways over the past few months while the market has been in correction mode. This is the kind of stock we want to include in our portfolio – one that is trending well and experiencing positive earnings estimate revisions. The stock has soared more than 80% this year and continues to make a series of higher highs. Only stocks that are in extremely powerful uptrends are able to weather bear markets so gracefully.
Image Source: StockCharts
Notice how the 50 and 200-day moving averages as evidenced by the blue and red lines, respectively, are both sloping up. The stock is displaying relative strength versus the market – a bullish sign.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, EnLink Midstream has seen a steady batch of positive revisions as of late. As long as this trend remains intact (and ENLC continues to post earnings beats), the stock should continue its bullish run through the end of this year and beyond.
Bottom Line
With a history of surpassing earnings estimates and an improving future outlook, EnLink Midstream represents a great opportunity. With a $0.45 (3.81%) dividend yield, it’s not difficult to see why this stock is a compelling investment.
Solid institutional buying and a high-performing industry group should continue to provide a tailwind for the stock price. Recent positive earnings estimate revisions will help to provide a cushion during any further market decline. If you’re looking for a way to diversify your portfolio, make sure to put ENLC on your shortlist.
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Bull of the Day: EnLink Midstream, LLC (ENLC)
EnLink Midstream (ENLC - Free Report) , a Zacks Rank #1 (Strong Buy) stock, has benefitted immensely from the commodity price surge this year. After falling under $1/share during the initial onset of the coronavirus pandemic, the stock has surged over 1,500% since March 2020 and continues to make a series of higher highs. Only stocks that are garnering extreme buying pressure are able to make this type of price move, going from penny stock to double digits in just a two-year time span. ENLC is currently trading near new highs on the year, even as the market continues to hover in a correction.
ENLC boasts our highest-possible ‘A’ ratings for each of our Zacks Growth and Momentum Style Score categories, indicating a strong likelihood that the stock propels higher on the powerful combination of positive earnings estimate revisions and stock price performance. The company is a component of the Zacks Oil & Gas – Refining & Marketing industry, which ranks in the top 2% of all Zacks Ranked Industries. The group is up more than 43% this year while the S&P is down more than 20%. This industry holds several attractive characteristics as shown below:
Image Source: Zacks Investment Research
Quantitative research studies have repeatedly shown that roughly half of a stock’s future price appreciation is due to its industry grouping. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months. By targeting stocks contained within top industry groups, investors can dramatically improve their rate of success.
Company Description
EnLink Midstream, LLC provides midstream energy services domestically. The company is engaged in the gathering, processing, transporting, storing, and selling of natural gas and crude oil. Its midstream network includes over 12,000 miles of pipelines and more than 20 natural gas processing plants.
ENLC is also involved in carbon capture, in an effort to obtain real progress in terms of the decarbonization of the global economy. Just last month, the company announced that it entered a transportation service agreement with a subsidiary of ExxonMobil, where it will utilize portions of its existing pipeline network as well as new facilities to deliver carbon dioxide from the Mississippi River corridor to ExxonMobil’s carbon dioxide storage location.
Earnings Trends and Future Estimates
ENLC has exceeded earnings estimates in each of the past four quarters, sporting an average 92.58% beat over that timeframe. Last week, the oil and gas company reported third-quarter earnings of $0.18 cents per share, which translated to a 63.64% positive surprise versus the $0.11/share consensus estimate.
Looking ahead, earnings estimates for the current quarter as well as 2023 have been skyrocketing. Analysts are in agreement and in the past 30 days, Q4 EPS estimates have been increased by 25% to $0.15 per share. This reflects a 36.4% growth rate relative to the same quarter last year. It’s obvious the growth is there and looks set to continue.
Image Source: Zacks Investment Research
Charting the Course
ENLC has continued its winning ways over the past few months while the market has been in correction mode. This is the kind of stock we want to include in our portfolio – one that is trending well and experiencing positive earnings estimate revisions. The stock has soared more than 80% this year and continues to make a series of higher highs. Only stocks that are in extremely powerful uptrends are able to weather bear markets so gracefully.
Image Source: StockCharts
Notice how the 50 and 200-day moving averages as evidenced by the blue and red lines, respectively, are both sloping up. The stock is displaying relative strength versus the market – a bullish sign.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. And as we know, EnLink Midstream has seen a steady batch of positive revisions as of late. As long as this trend remains intact (and ENLC continues to post earnings beats), the stock should continue its bullish run through the end of this year and beyond.
Bottom Line
With a history of surpassing earnings estimates and an improving future outlook, EnLink Midstream represents a great opportunity. With a $0.45 (3.81%) dividend yield, it’s not difficult to see why this stock is a compelling investment.
Solid institutional buying and a high-performing industry group should continue to provide a tailwind for the stock price. Recent positive earnings estimate revisions will help to provide a cushion during any further market decline. If you’re looking for a way to diversify your portfolio, make sure to put ENLC on your shortlist.