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EOG Resources (EOG) Up 35.2% YTD: What's Behind the Rally?
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Shares of EOG Resources, Inc. (EOG - Free Report) have jumped 35.2% year to date (YTD) compared with the sector’s 16.6% growth. The Zacks Rank #2 (Buy) stock witnessed a rise in the Zacks Consensus Estimate for 2021 and 2022 earnings over the past 30 days.
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The price of West Texas Intermediate crude, which is trading above $61 per barrel (almost at pre-pandemic levels), has improved significantly since April 2020, when oil was in the negative territory. The momentum is likely to continue since the coronavirus vaccine rollout will possibly help the economy recover strongly this year, thereby aiding fuel demand.
Reportedly, OPEC+ (OPEC and its non-OPEC partners) is not considering an increase in output in today’s meeting, when they will decide on policies regarding production beyond March. Rather, the cartel and its non-OPEC allies led by Russia will probably rollover production cut into April from March. The news is also aiding the rally in crude price.
Overall, improving oil prices are definitely a boon for oil explorers and producers and EOG Resources, having strong footprint in prolific shale plays like Permian Basin and Eagle Ford, is well placed to capitalize on the favorable pricing scenario.
The upstream player is committed in returning cash to shareholders. Notably, the company announced a quarterly dividend of 41.25 cents per share, representing an increase of 10% from the prior dividend.
Moreover, the upstream energy company has a strong balance sheet on which it could rely to sail through the coronavirus pandemic-induced market uncertainties. Importantly, the balance sheet has significantly lower debt levels compared with composite stocks belonging to the industry. Also, the company added that by 2025, it is planning for zero routine flaring.
Matador is likely to see earnings growth of 201.3% in 2021.
Pioneer Natural has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
Image: Bigstock
EOG Resources (EOG) Up 35.2% YTD: What's Behind the Rally?
Shares of EOG Resources, Inc. (EOG - Free Report) have jumped 35.2% year to date (YTD) compared with the sector’s 16.6% growth. The Zacks Rank #2 (Buy) stock witnessed a rise in the Zacks Consensus Estimate for 2021 and 2022 earnings over the past 30 days.
Let’s delve into the factors behind the stock’s price appreciation.
What’s Favoring the Stock?
The price of West Texas Intermediate crude, which is trading above $61 per barrel (almost at pre-pandemic levels), has improved significantly since April 2020, when oil was in the negative territory. The momentum is likely to continue since the coronavirus vaccine rollout will possibly help the economy recover strongly this year, thereby aiding fuel demand.
Reportedly, OPEC+ (OPEC and its non-OPEC partners) is not considering an increase in output in today’s meeting, when they will decide on policies regarding production beyond March. Rather, the cartel and its non-OPEC allies led by Russia will probably rollover production cut into April from March. The news is also aiding the rally in crude price.
Overall, improving oil prices are definitely a boon for oil explorers and producers and EOG Resources, having strong footprint in prolific shale plays like Permian Basin and Eagle Ford, is well placed to capitalize on the favorable pricing scenario.
The upstream player is committed in returning cash to shareholders. Notably, the company announced a quarterly dividend of 41.25 cents per share, representing an increase of 10% from the prior dividend.
Moreover, the upstream energy company has a strong balance sheet on which it could rely to sail through the coronavirus pandemic-induced market uncertainties. Importantly, the balance sheet has significantly lower debt levels compared with composite stocks belonging to the industry. Also, the company added that by 2025, it is planning for zero routine flaring.
Other Stocks to Consider
Other prospective players in the energy space include Matador Resources Company (MTDR - Free Report) , Pioneer Natural Resources Company (PXD - Free Report) and Diamondback Energy, Inc. (FANG - Free Report) . While Pioneer Natural carries a Zacks Rank #2,Diamondback and Matador sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Matador is likely to see earnings growth of 201.3% in 2021.
Pioneer Natural has seen upward estimate revisions for 2021 earnings in the past 30 days.
Diamondback is likely to see earnings growth of 55% in 2021.
The Hottest Tech Mega-Trend of All
Last year, it generated $24 billion in global revenues. By 2020, it's predicted to blast through the roof to $77.6 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>