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Oil Prints YTD Highs: 2 Top Ranked Energy Stocks to Buy Now
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After leading the market in 2022, and then lagging for most of this year, energy stocks are again back in favor as oil prices have rallied nearly 20% in the last five weeks. Not surprisingly, energy has been the strongest sector in the market over the last month.
WTI Oil prices have now made new YTD highs and have cleared a major level of resistance that has held down the price for most of the year.
Additionally, several promising energy stocks have now jumped to the top of the Zacks #1 Rank list, indicating upward trending earnings revisions, and boosting near term expectations.
CVR Energy (CVI - Free Report) and Solaris Oilfield Infrastructure (SOI - Free Report) both boast Zacks Rank #1 (Strong Buy) ratings and considerable price momentum.
Image Source: TradingView
CVR Energy
CVR Energy is a diversified energy company engaged in refining and marketing operations. With its headquarters in Sugar Land, Texas, CVR Energy operates through its subsidiaries, including the Coffeyville Resources Refining & Marketing (CRRM) complex in Kansas.
CVI’s activities span petroleum refining, nitrogen fertilizer manufacturing, and transportation services. As an integrated energy player, CVR Energy aims to optimize its refining and nitrogen assets while capitalizing on market dynamics in the energy and agriculture sectors.
CVI stock has put up an enviable performance over the last three years, compounding at 40% annually, and outperforming both the industry and broad market. It also offers a generous 5.3% dividend yield to boot.
Image Source: Zacks Investment Research
CVR Energy has seen some substantial revisions higher in its earnings estimates. In just the last week, current quarter earnings estimates have been upgraded by 51.2% to $1.24 per share. While, FY23 earnings estimates have been revised higher by 28% to $4.73 per share.
Additionally, CVI earns an A in all Zacks Style Scores, including Value, Momentum, Growth, and VGM.
Image Source: Zacks Investment Research
CVR Energy is trading at a one year forward earnings multiple of 8x, which is above the industry average of 6.8x, and above its five-year median of 5.5x.
Image Source: Zacks Investment Research
Solaris Oilfield Infrastructure
Solaris Oilfield Infrastructure manufactures and provides patented mobile proppant management systems which unload, store, and deliver proppant at oil and natural gas well sites. Proppant is a solid material, typically sand, treated sand or man-made ceramic materials, designed to keep an induced hydraulic fracture open, during or following a fracturing treatment.
Its systems are deployed in many of the most active oil and natural gas basins in the United States, including the Permian Basin, the Eagle Ford Shale, and the SCOOP/STACK formation.
Reflecting its upward trending earnings revisions SOI enjoys a top Zacks Rank. Current quarter earnings estimates have been revised higher by 10% to $0.22 per share. FY223 earnings estimates have been upgraded by 10.5% and are projected to grow 25% YoY to $0.95 per share.
Image Source: Zacks Investment Research
After dealing with some challenging price action earlier in the year SOI has rallied back and is now positive on the year. It also broke above a critical level of resistance and is building a technical pattern that could launch the stock considerably higher.
Over the last couple of weeks, SOI stock has built out a tidy bull flag from which investors can measure a trade. If SOI price can close above the $11.10 level, it should confirm a breakout and initiate another leg higher. However, if the stock loses the $10.55 level, investors should remain cautious as the setup will no longer be valid.
Image Source: TradingView
Solaris Oilfield Infrastructure is trading at a one year forward earnings multiple of 11.6x, which is below the industry average of 16.3x, and above its five-year median of 8.5x. Finally, SOI pays a dividend yield of 4%, which it has increased by an average of 1.6% annually over the last five years.
Image Source: Zacks Investment Research
Bottom Line
Throughout this year the oil bears have been running the show, however it seems the tide has turned, and oil is going to begin another major leg higher. Further evidence supporting higher oil prices is an economy the seems to be accelerating to above trend growth. Today, the US economy is estimated to be growing at 4.1% annually, an impressive pace that is likely to put a floor under the price of oil.
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Oil Prints YTD Highs: 2 Top Ranked Energy Stocks to Buy Now
After leading the market in 2022, and then lagging for most of this year, energy stocks are again back in favor as oil prices have rallied nearly 20% in the last five weeks. Not surprisingly, energy has been the strongest sector in the market over the last month.
WTI Oil prices have now made new YTD highs and have cleared a major level of resistance that has held down the price for most of the year.
Additionally, several promising energy stocks have now jumped to the top of the Zacks #1 Rank list, indicating upward trending earnings revisions, and boosting near term expectations.
CVR Energy (CVI - Free Report) and Solaris Oilfield Infrastructure (SOI - Free Report) both boast Zacks Rank #1 (Strong Buy) ratings and considerable price momentum.
Image Source: TradingView
CVR Energy
CVR Energy is a diversified energy company engaged in refining and marketing operations. With its headquarters in Sugar Land, Texas, CVR Energy operates through its subsidiaries, including the Coffeyville Resources Refining & Marketing (CRRM) complex in Kansas.
CVI’s activities span petroleum refining, nitrogen fertilizer manufacturing, and transportation services. As an integrated energy player, CVR Energy aims to optimize its refining and nitrogen assets while capitalizing on market dynamics in the energy and agriculture sectors.
CVI stock has put up an enviable performance over the last three years, compounding at 40% annually, and outperforming both the industry and broad market. It also offers a generous 5.3% dividend yield to boot.
Image Source: Zacks Investment Research
CVR Energy has seen some substantial revisions higher in its earnings estimates. In just the last week, current quarter earnings estimates have been upgraded by 51.2% to $1.24 per share. While, FY23 earnings estimates have been revised higher by 28% to $4.73 per share.
Additionally, CVI earns an A in all Zacks Style Scores, including Value, Momentum, Growth, and VGM.
Image Source: Zacks Investment Research
CVR Energy is trading at a one year forward earnings multiple of 8x, which is above the industry average of 6.8x, and above its five-year median of 5.5x.
Image Source: Zacks Investment Research
Solaris Oilfield Infrastructure
Solaris Oilfield Infrastructure manufactures and provides patented mobile proppant management systems which unload, store, and deliver proppant at oil and natural gas well sites. Proppant is a solid material, typically sand, treated sand or man-made ceramic materials, designed to keep an induced hydraulic fracture open, during or following a fracturing treatment.
Its systems are deployed in many of the most active oil and natural gas basins in the United States, including the Permian Basin, the Eagle Ford Shale, and the SCOOP/STACK formation.
Reflecting its upward trending earnings revisions SOI enjoys a top Zacks Rank. Current quarter earnings estimates have been revised higher by 10% to $0.22 per share. FY223 earnings estimates have been upgraded by 10.5% and are projected to grow 25% YoY to $0.95 per share.
Image Source: Zacks Investment Research
After dealing with some challenging price action earlier in the year SOI has rallied back and is now positive on the year. It also broke above a critical level of resistance and is building a technical pattern that could launch the stock considerably higher.
Over the last couple of weeks, SOI stock has built out a tidy bull flag from which investors can measure a trade. If SOI price can close above the $11.10 level, it should confirm a breakout and initiate another leg higher. However, if the stock loses the $10.55 level, investors should remain cautious as the setup will no longer be valid.
Image Source: TradingView
Solaris Oilfield Infrastructure is trading at a one year forward earnings multiple of 11.6x, which is below the industry average of 16.3x, and above its five-year median of 8.5x. Finally, SOI pays a dividend yield of 4%, which it has increased by an average of 1.6% annually over the last five years.
Image Source: Zacks Investment Research
Bottom Line
Throughout this year the oil bears have been running the show, however it seems the tide has turned, and oil is going to begin another major leg higher. Further evidence supporting higher oil prices is an economy the seems to be accelerating to above trend growth. Today, the US economy is estimated to be growing at 4.1% annually, an impressive pace that is likely to put a floor under the price of oil.