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3 Intriguing Stocks to Consider as Oil & Gas Prices Remain Elevated
With the conflict in Iran leaving the Strait of Hormuz closed or at least severely limited to commercial shipping for the time being, energy stocks have become the center of attention as oil prices remain elevated.
The influential shipping route typically accounts for 20% of the global oil supply and roughly 25% of the world’s liquid natural gas (LNG), that normally passes through the strait.
Crude oil prices continue to hold above $90 per barrel, while LNG prices remain elevated as well, even as the peak winter season for natural gas usage comes to an end.
Keeping an eye on companies that may benefit, here are three energy sector stocks that made their way onto the coveted Zacks Rank #1 (Strong Buy) list this week.
Oil & Gas Field Service Providers
Elevated energy prices incentivize upstream investment (exploration & production), boosting drilling and maintenance activity, even as supply disruptions tighten global markets.
Coinciding with increased upstream production is the need for specialized oil and gas field services providers. Notably, the Zacks Oil and Gas-Field Services Industry is currently in the top 14% of over 240 Zacks industries.
Weatherford’s Prominence
Considered a significant and established player in the global oilfield services market, Weatherford International (WFRD - Free Report) is widely recognized as a prominent multinational company operating in more than 70 countries.
Weatherford offers drilling solutions, gas well unloading, restoration, and other related activities. Being a leader in a top-rated industry, Weatherford’s valuation stands out at 14X forward earnings, a discount to its peers' average of 19X.
This comes as WFRD has risen 12% year to date and has now rallied 60% in the last year as Weatherford has delivered stronger-than-expected earnings, expanded margins, and secured new multi-year contracts. Surprisingly higher free cash flows ($466 million) have also been appealing, with WFRD offering a respectable 1.17% annual dividend yield.
Image Source: Zacks Investment Research
A Penny Stock to Consider
Drilling Tools International (DTI - Free Report) is an upcoming player to consider in the top-rated Zacks Oil and Gas-Field Services Industry. The oilfield services provider manufactures and rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas wells.
Trading under $5 a share, DTI stock is roughly on par with the industry average of 19X forward earnings. Furthermore, it's noteworthy that DTI’s FY26 EPS is expected to spike 90% to $0.19. Moving further past the probability line, DTI’s annual earnings are projected to increase another 68% in FY27 to $0.32 per share. Reassuringly, FY26 and FY27 EPS estimates are nicely up in the last 30 days.
Image Source: Zacks Investment Research
CrossAmerica Capitalizes on High Motor Fuel Prices
Regarding oil refiners and marketers, CrossAmerica Partners (CAPL - Free Report) ) is a notable stock to watch. CrossAmerica is benefiting from higher motor-fuel prices, mainly through stronger retail fuel margins and merchandise sales rather than through higher wholesale volumes.
While higher gas prices may deter consumers from going to the pump, FY26 and FY27 EPS estimates are modestly higher for CrossAmerica in the last month. At $21 a share, CAPL does command a noticeable premium of 49X forward earnings but has been flagged as a top income stock to consider.
To that point, CrossAmerica operates as a Master Limited Partnership (MLP), which avoids corporate income tax by distributing the majority of its cash flow to shareholders. Keeping investors engaged, CrossAmerica has strengthened its balance sheet through major asset sales for $103 million, making its distribution more secure with one of the highest annual dividend yields in the energy sector at 9.78%.
Notably, CrossAmerica’s Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships Industry is in the top 36% of all Zacks industries.
Image Source: Zacks Investment Research
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3 Intriguing Stocks to Consider as Oil & Gas Prices Remain Elevated
With the conflict in Iran leaving the Strait of Hormuz closed or at least severely limited to commercial shipping for the time being, energy stocks have become the center of attention as oil prices remain elevated.
The influential shipping route typically accounts for 20% of the global oil supply and roughly 25% of the world’s liquid natural gas (LNG), that normally passes through the strait.
Crude oil prices continue to hold above $90 per barrel, while LNG prices remain elevated as well, even as the peak winter season for natural gas usage comes to an end.
Keeping an eye on companies that may benefit, here are three energy sector stocks that made their way onto the coveted Zacks Rank #1 (Strong Buy) list this week.
Oil & Gas Field Service Providers
Elevated energy prices incentivize upstream investment (exploration & production), boosting drilling and maintenance activity, even as supply disruptions tighten global markets.
Coinciding with increased upstream production is the need for specialized oil and gas field services providers. Notably, the Zacks Oil and Gas-Field Services Industry is currently in the top 14% of over 240 Zacks industries.
Weatherford’s Prominence
Considered a significant and established player in the global oilfield services market, Weatherford International (WFRD - Free Report) is widely recognized as a prominent multinational company operating in more than 70 countries.
Weatherford offers drilling solutions, gas well unloading, restoration, and other related activities. Being a leader in a top-rated industry, Weatherford’s valuation stands out at 14X forward earnings, a discount to its peers' average of 19X.
This comes as WFRD has risen 12% year to date and has now rallied 60% in the last year as Weatherford has delivered stronger-than-expected earnings, expanded margins, and secured new multi-year contracts. Surprisingly higher free cash flows ($466 million) have also been appealing, with WFRD offering a respectable 1.17% annual dividend yield.
Image Source: Zacks Investment Research
A Penny Stock to Consider
Drilling Tools International (DTI - Free Report) is an upcoming player to consider in the top-rated Zacks Oil and Gas-Field Services Industry. The oilfield services provider manufactures and rents downhole drilling tools used in horizontal and directional drilling of oil and natural gas wells.
Trading under $5 a share, DTI stock is roughly on par with the industry average of 19X forward earnings. Furthermore, it's noteworthy that DTI’s FY26 EPS is expected to spike 90% to $0.19. Moving further past the probability line, DTI’s annual earnings are projected to increase another 68% in FY27 to $0.32 per share. Reassuringly, FY26 and FY27 EPS estimates are nicely up in the last 30 days.
Image Source: Zacks Investment Research
CrossAmerica Capitalizes on High Motor Fuel Prices
Regarding oil refiners and marketers, CrossAmerica Partners (CAPL - Free Report) ) is a notable stock to watch. CrossAmerica is benefiting from higher motor-fuel prices, mainly through stronger retail fuel margins and merchandise sales rather than through higher wholesale volumes.
While higher gas prices may deter consumers from going to the pump, FY26 and FY27 EPS estimates are modestly higher for CrossAmerica in the last month. At $21 a share, CAPL does command a noticeable premium of 49X forward earnings but has been flagged as a top income stock to consider.
To that point, CrossAmerica operates as a Master Limited Partnership (MLP), which avoids corporate income tax by distributing the majority of its cash flow to shareholders. Keeping investors engaged, CrossAmerica has strengthened its balance sheet through major asset sales for $103 million, making its distribution more secure with one of the highest annual dividend yields in the energy sector at 9.78%.
Notably, CrossAmerica’s Zacks Oil and Gas - Refining and Marketing - Master Limited Partnerships Industry is in the top 36% of all Zacks industries.
Image Source: Zacks Investment Research