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Murphy Oil's (MUR) Strong Portfolio & Cost Savings Bode Well

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Murphy Oil Corporation’s (MUR - Free Report) cost-saving initiatives and low-cost asset development are expected to boost its performance in the future.

We recently issued an updated research report on this currently Zacks Rank #2 (Buy) company. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The company has a trailing four-quarter earnings surprise of 35.91%, on average.

What’s Driving the Stock?

Murphy Oil possesses one of the best upstream portfolios among the domestic oil and natural gas integrated companies as well as within the independent E&P group. The company is regularly pursuing developmental activities in the United States and on foreign shores. It undertook cost-containment initiatives and has a target to lower its 2020 G&A expenses by 50% from the 2015 levels.

Over the past several months, the company has been trying to transform its portfolio through strategic moves like acquisitions, divestitures and oil-weighted discoveries. Its focus on developing high-margin liquid assets is evident from the production mix. The company is maintaining a multi-basin portfolio including its onshore and offshore assets for additional risk- reduction flexibility amid the fluctuating prices.


However, Murphy Oil operates in a highly- competitive environment, which might dent its profitability. Also, stringent regulations and unfavorable foreign currency conversion rates are its near-term concerns.

Price Performance

Shares of Murphy Oil have soared 50.3% in the past six months compared with the industry’s 42.7% rise.

Other Stocks to Consider

A few other top-ranked stocks in the same industry are Concho Resources Inc. (CXO - Free Report) , EOG Resources, Inc. (EOG - Free Report) and Parsley Energy, Inc. (PE - Free Report) , all stocks carrying a the same Zacks Rank as Murphy Oil, presently.

Concho Resources delivered an earnings surprise of 67.15%, on average, in the last four quarters. It has a long-term (three-five years) earnings growth rate of 11.93%.

EOG Resources has a long-term earnings growth rate of 8.38%. The Zacks Consensus Estimate for 2020 earnings has moved 8.5% north in the past 30 days.

Parsley Energy delivered an earnings surprise of 28.26%, on average, in the trailing four quarters. It has a long-term earnings growth rate of 36.53%.

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